February 3, 2012

 

FrieslandCampina to acquire Imlek and Mlekara Subotica in Southeast Europe 

 

FrieslandCampina and Salford Capital Partners have signed a Memorandum of Understanding regarding the acquisition of dairy companies Imlek and Mlekara Subotica in the Western Balkans.

 

Salford Capital Partners currently holds majority stakes in the two dairy companies of approximately 79% and 82% respectively. The companies' shares are traded on the Belgrade Stock Exchange.

 

FrieslandCampina intends to acquire the remaining shares. This is the first substantial acquisition since the merger between Friesland Foods and Campina in 2008.

 

FrieslandCampina's route2020 strategy is designed to increase worldwide its position in dairy-based beverages, infant nutrition and branded cheese and to generate maximum value for the milk produced by the cooperative's member farmers.

 

According to Cees 't Hart, CEO of Royal FrieslandCampina N.V.: "FrieslandCampina wants to grow in various markets and product categories. This acquisition strengthens our brand portfolio and our position in South Eastern Europe, one of the spearheads of our route2020 strategy."

 

Imlek has activities under various brand names in Serbia, Montenegro, Bosnia and Herzegovina, and the Former Yugoslav Republic of Macedonia, while Mlekara Subotica has activities in Serbia.

 

This, together with FrieslandCampina's current activities in Hungary, Romania and Greece, will give the group access to a total of about 76 million consumers in the region. The combination with FrieslandCampina's existing activities in the South-East Europe region creates a strong basis for further growth.

 

Imlek and Mlekara Subotica operate as independent dairy companies in the Western Balkans. Together they serve markets of around 25 million consumers. The total turnover amounts to approximately EUR270 million (US$355 million). Imlek holds a strong position with its brands in the Serbian retail market and will provide an attractive entry point into the Western Balkans as it is also well placed in neighbouring markets.

 

It has a portfolio of well-known, established brands with strong positions in the markets for ready to drink milk, yoghurt, cheese and cream products. The brand portfolio of Mlekara Subotica consists mainly of added-value products, which account for more than half of its revenues and comprise various fermented and specialty products such as spreads and cheeses. Around one third of its revenues is attributable to ready-to-drink milk products (long-life and fresh).

 

Both parties expect the deal to be completed in the next few months. In case both parties come to a final agreement, the takeover bid will be in local currency and in accordance with local legislation will be open to minority shareholders. The acquisition will be debt financed.

 

FrieslandCampina has been advised by Lazard and Raiffeisen Investment AG.