Cherkizovo to acquire two pork farms

Russia meat producer Cherkizovo is to acquire two greenfield pork farms in the Penza and Lipetsk regions.

The acquisitions were approved at a board meeting on Thursday (June 3) after members reviewed a report by an independent appraiser and the results of an independently performed due diligence work.

The board approval follows the memorandum of understanding to acquire the controlling interest in the two pork production farms, which was signed in March.

The total consideration for the transaction is expected to be in the region of US$100 million, of which approximately US$20 million will be payable in cash.

The group will assume the acquired entities' outstanding debt at the time of acquisition, which is expected to be approximately US$80 million.

The complexes are expected to reach their full combined capacity of 25,000 live-weight tonnes in 2012 and increase Cherkizovo's pork production capacity by almost 30% from the current capacity.

Earlier, the meat processor posted its first-quarter financial results, recording a 29% year-on-year rise in revenue to US$268.0 million and a 32% increase in net profit to US$31.0 million.