February 22, 2011

Cherkizovo likely to buy poultry business

Cherkizovo Group is in talks to buy the poultry division of the Moscow-based Mosselprom, Europe's largest agribusiness and the biggest investment project in Russia's agriculture, stated industry analysts.

The deal does not include the company's pig breeding and plant growing, one of the sources said.

Sources in Mosselprom and people close to the largest Cherkizovo owners have confirmed the talks, saying that the sides have not yet inked the deal.

The purchase of Mosselprom's chicken farms could significantly strengthen Cherkizovo's positions in the local poultry market.

This business brings Mosselprom, owned by Sergei Lisovsky, more than 80% of revenue. In 2009, the poultry business brought Mosselprom RUB3.14 billion (US$107.4 million, or EUR78.8 million) of revenue under Russian Accounting Standards and a net profit of RUB1.4 million (US$47,881 million).

Experts evaluate the deal at between US$70 million and US$100 million.