December 29, 2021

Cherkizovo acquires turkey producer Krasnobor for US$25.8 billion

Cherkizovo Group has reached an agreement to acquire Russia's third largest turkey producer Krasnobor based in Tula, Russia, for ₽1.9 billion (US$25.8 million), including debt.

This acquisition is set to bolster Cherkizovo's position in the fast-growing market of turkey products and create strong synergies with the meat processing facilities that the group will build in the Tula Region.

AIC Mikhailovsky (part of Cherkizovo Group) has agreed with the owners of Krasnobor to acquire their stakes in the company. Russia Partners Fund will sell 57.7 %, Arkady Levin, the founder of Krasnobor – 24.5 %, with the remaining 17.8 % to be bought from minority shareholders. The deal for a total consideration of ₽1.9 billion, including Krasnobor's debt of ₽600 million (US$8.1 million), has already been approved by the Russian Federal Antimonopoly Service.

Cleary Gottlieb Steen & Hamilton and KPMG acted as Cherkizovo Group's advisers on the deal.

Founded back in 2000, Krasnobor owns turkey breeding and production facilities in the Leninsky and Novomoskovsky districts of the Tula Region. It offers a wide range of products under the Krasnobor brand and ranks third in the Russian turkey market, boasting output of 27.2 thousand tonnes of live-weight turkey meat last year.

Cherkizovo Group's Tambov Turkey (Pava Pava brand) holds the second place with 57 thousand tonnes produced in 2020 (2021 guidance is about 80 thousand tonnes).

"The acquisition of Krasnobor is in line with our strategy to ramp up production of turkey, which enjoys a steadily growing demand. We plan to increase our share in this promising market both organically and through M&A activities," said Sergey Mikhailov, chief executive officer of Cherkizovo Group.

"It is also important for us that Cherkizovo will be involved in turkey production in the Tula Region, whose role continues to grow in our business: in the next few years, we will build a large meat processing cluster there and expect synergies arising between the Krasnobor sites and our new facilities."

- Cherkizovo