OREANDA-NEWS. AB Linas Agro Group, that have signed agreements with Latvian private and legal persons on acquisition of 87% of shares in Latvian company AS Putnu fabrika Kekava, acquisition of 100% of shares in Latvian company SIA Broileks, acquisition of 100% of shares in Latvian company SIA Cerova and acquisition of 100% of shares in Latvian company SIA Lielzeltini a few months ago, received the permission of the Competition Council of the Republic of Latvia to acquire poultry companies in Latvia. The transactions should be completed by January 2014.

AB Linas Agro Group estimates to spend EUR 13 million on acquisition of shares of the Latvian companies.

The largest of the purchased companies is a full cycle chicken meat producer AS Putnu fabrika Kekava (PFK), which cover the entire production cycle, from egg laying to the chicken and its products production. The other three companies are already co-operating: SIA Cerova hatch eggs and sells day-old chicks to companies Lielzeltini and Broileks. SIA Broileks raise chickens and sell them to Lielzeltini. While Lielzeltini raise chickens and produce poultry products, also produce feed for all other companies. AB Linas Agro Group plans to implement vertical integration in acquired companies - feed production, incubation and rearing, slaughtering and meat processing.

“We enter the business area, food production, that is closely related to our core business. By acquiring these companies we expect positive synergy with our core activities as we are one of the largest feedstuff suppliers in the Baltics. Feedstuff accounts for a vast majority of cost of goods produced in poultry companies. To quickly gain know-how in poultry business, we are currently collecting team that will develop our new business in Latvia. We are not newcomers to Latvia - two companies of our Group, running business in Latvia, earned LTL 218 million revenue and nearly LTL 14 million gross profit during the financial year 2012/2013”, says AB Linas Agro Group Deputy Managing Director Andrius Pranckevicius.

Revenue of AS Putnu Fabrika KEKAVA ( PFK ) reached EUR 33 million in 2012, SIA Lielzeltini gained EUR 21 million revenue, SIA Broileks - EUR 1.2 million, SIA Cerova - EUR 2 million.

AB Linas Agro Group expects that in the future the acquired group of Latvian companies will generate revenue of around EUR 70 million.