AB Linas Agro Group sells subsidiaries in Russia and Belarus
AB Linas Agro Group sells two Russian companies acquired 13 months ago as a part of KG Group - OOO VitOMEK (Moscow) and OOO VitOMEK (Tver), also IOOO Belfidagro, registered in Belarus. The contracts for the sale of these companies were signed on 25 July. The buyers are companies registered in the Russian Federation, but by agreement of the parties, they are not disclosed. The transactions, totaling EUR 7.5 million, are expected to be completed by the end of the calendar year.
The companies on sale are engaged in the production and wholesale of premixes and in the wholesale of feed and raw materials for feed production. At the end of July, they employed 240 people.
The sale of Belfidagro is subject to the approval of the Belarusian competition authority MART (Ministry of Antitrust Regulation and Trade), so the parties signed a preliminary share purchase agreement, which stipulates that the buyer must obtain clearance from the competition authority.
More than a year ago, with the acquisition of KG Group, AB Linas Agro Group became the owner of five companies in Russia and Belarus. One of the acquired companies, OOO GeoMiks, was deregistered as early as 2021 by merging with OOO VitOMEK. The remaining companies were prepared for sale, and the search for potential buyers started at the end of 2021.
‘We had planned to sell companies in Russia and Belarus without a hurry; unfortunately, the situation has changed radically. The war in Ukraine has disrupted negotiations with the buyers we already had. The process of finding buyers was restarted, and intensive negotiations with several buyers followed. We had no expectation that we would sell the companies on the terms we expected back in early 2022. Negotiations and fine-tuning the sale details took some time, so we are delighted to have finally completed this difficult phase’, said Darius Zubas, Chairman of the Board of AB Linas Agro Group.
After the war's outbreak in Ukraine, Linas Agro Group's subsidiaries broke their partnerships with Russian and Belarusian businesses, looking for alternative suppliers, goods, and new logistics routes. They did not also cooperate with the companies on sale.
‘We didn't even have time to know better the companies we acquired last July, as we broke off contact with them at the end of February due to the war. One company in Belarus, OOO KLM, could not be sold together with the others as we could not find an interested buyer; thus, we are continuing our search for buyers’, commented D. Zubas.
OOO KLM is different from the other companies on sale - it is a wholesaler of agricultural inputs, veterinary goods, premixes, and seeds. This company is jointly owned by the public company Kauno Grūdai, which Linas Agro Group has acquired, and a natural person in Belarus; Kauno Grūdai holds 70% of its shares. The company employed 62 people at the end of July.
The company plans to disclose the impact of the sale of the companies on Linas Agro Group's future financial results in its 3-month reports for FY 2022/2023.
AB Linas Agro Group is the Baltics' largest agricultural and food production group, comprising 72 subsidiaries and two associates, their overall headcount is 5.2 thousand. The group operates along the entire food production chain from the field to the table: the company’s subsidiaries produce, process, and market agricultural and food products, and provide goods and services to farmers.
For more information, contact:
Mažvydas Šileika
CFO of AB Linas Agro Group
Mob.
