Agrone Grupp has acquired Latvia’s largest dairy processing companies, Rīgas piena kombināts and Valmieras piens

A deal was finalised today whereby “Agrone”, Estonia’s largest agricultural group, acquired Latvia’s largest dairy processing companies, “Rīgas piena kombināts” and “Valmieras piens”.

Approximately one-third of “Rīgas piena kombināts”’s output is exported to more than 35 countries worldwide. The two factories employ a total of just over 750 staff.

As part of the transaction, the “Agrone” Group, through its parent company, acquired 100 per cent of the shares in “Food Union Management”. This company holds controlling stakes in both Latvian dairy processing companies. The shares were acquired from the previous owner, “Food Union Luxembourg Holdings II S.à r.l.”. The transaction was finalised following approval from the competition authorities in Estonia and Latvia. The transaction was financed by SEB Bank.

Raul Jeets, Chairman of the Board of “Agrone”, stated that this is a historic transaction for the dairy industry in both countries.

“Rīgas piena kombināts” – a company with a history stretching back almost a century, which holds a strong market position and owns brands that are well-known and popular with consumers across the Baltic states, such as „‘Kārums’ and ‘Lakto’. By combining ‘Agrone’s’ expertise in raw milk production with ‘Rīgas piena kombināts’ ’ expertise in milk processing, product development and sales, we will create a solid foundation for increasing the group’s overall business volume, improving efficiency and strengthening competitiveness“, he said.

According to R. Jeets, “Agrone” has been seeking to expand its operations for many years and to begin processing milk alongside its production.

Joosep Kadak, Head of Corporate Banking at SEB Bank, which financed the transaction, stated that “Agrone” is an excellent example of how an agricultural company that has grown on the basis of Estonian capital is taking the next step towards becoming an integrated group of companies in the Baltic states.

“Rīgas piena kombināts” and “Valmieras piens” already export around a third of their output to more than 30 countries.

The value of the transaction is not being disclosed by mutual agreement between the parties.

The next step is for the management teams of “Agrone” and the Latvian companies to jointly draw up a strategy for further expansion.