Royal Friesland to take over dairy companies Imlek and Mlekara Subotica

The company Royal Friesland, headquartered in the Netherlands, announced today that it would take over dairy companies Imlek AD Beograd and Mlekara Subotica, which are currently majority owned by Salford.

FrieslandCampina and Salford Capital Partners have signed a Memorandum of Understanding regarding the acquisition of Imlek and Mlekara Subotica. The acquisition strengthens FrieslandCampina’s position in South-East Europe, a region with about 76 million consumers, it was announced in Amersfoort, the Netherlands.

This acquisition will add the activities of both companies in the Western Balkans to the FrieslandCampina network.

Salford Capital Partners currently holds majority stakes in the two dairy companies of approximately 79% and 82%, respectively. The companies’ shares are traded on the Belgrade Stock Exchange.

FrieslandCampina intends to acquire the remaining shares. This is the first substantial acquisition since the merger between Friesland Foods and Campina in 2008.

According to Cees ‘t Hart, CEO of Royal FrieslandCampina N.V., FrieslandCampina wants to grow in various markets and product categories.

- This is the first major acquisition since the merger between Friesland Foods and Campina. This acquisition strengthens our brand portfolio and our position in South Eastern Europe, one of the spearheads of our route2020 strategy - said CEO of Royal FrieslandCampina.

The acquisition of Imlek and Mlekara Subotica, together with FrieslandCampina’s current activities in Hungary, Romania and Greece, will give the group access to a total of about 76 million consumers in the region.

As Imlek CEO Slobodan Petrovic explained, it is a great opportunity for the region, Imlek, Mlekara Subotica and FrieslandCampina.

- Our product portfolios fit well with FrieslandCampina’s current brand portfolio. I am confident that both companies will flourish under the FrieslandCampina flag and to the benefit of their consumers - said Petrovic.

Both parties expect the deal to be completed in the next few months. In case both parties come to a final agreement, the takeover bid will be in local currency and in accordance with local legislation will be open to minority shareholders. The acquisition will be debt financed. It has been agreed not to make any further comments before the end of the negotiations.

The closing of the transaction is subject to various conditions, including completion of due diligence by the buyer, agreement on the final transaction documentation and receipt required regulatory approvals, amongst others local competition authorities.

Based on the 2010 report, the annual revenues of Royal FrieslandCampina are close to EUR 9 billion. The company employs nearly 19,500 people and operates in 25 countries through 100 production facilities and retail stores.