Entrepreneurship is not just cold numbers but also an activity full of emotions, adrenaline, ego, and even social responsibility. From this perspective, Luka Rajić has no right to sell Dukat as it is today.
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Written by: Miodrag Šajatović |
It would be devastating if the domestic entrepreneurial elite began to mass sell their empire and invest the earned money in a rentier manner. |
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After it was announced last week that Ante Perković paid Luka Rajić and took over the non-alcoholic beverage factory Eurobev (well, it would be more accurate to say that Badel 1862 paid Luri), it was expected that Rajić would use that money for the announced acquisitions of dairy industries in the region. For example, in Macedonia. Instead, the public was informed via the stock exchange that Rajić’s Dukat d.d. ‘is considering the possibility of a strategic partnership with the Lactalis group, one of the leading global dairy groups… following which Lactalis was granted exclusive rights to conduct a due diligence of the business starting on March 1, 2007.’ The initial reactions of the business community to this news are identical: a strategic partnership is just another name for a process at the end of which Luka Rajić will sell Dukat. Regardless of the fact that Rajić has proven many times that it is difficult to predict his moves, this time it is hard to imagine a ‘strategic’ partnership in which there would be equality between a national company (Dukat) and a multinational like Lactalis. I would be glad to be wrong. From a cold business perspective, as almost a hundred percent owner of Dukat, Luka Rajić can sell the company whenever and to whomever he wants. Given that entrepreneurship is not just cold numbers but also an activity full of emotions, adrenaline, ego, and even social responsibility, let it be permitted for the columnist to write that from this perspective, Luka Rajić has no right to sell Dukat as it is today. If Dukat is taken over, this event could mark the beginning of the end of the ownership structure created by the transformation and privatization that began in the early 1990s. Rationally speaking, this is indeed the right time to sell companies. Business optimism in Croatia is at its peak. External debt is still rising and covering all domestic irrationality, the IMF praises the local conditions, EU membership is getting closer, and there is so much capital in the world looking for a target for acquisition that any decent company can achieve an above-average good price. And if it is not optimally managed, with additional financial injections and more aggressive management, it can make a significant leap in a short time – a ‘bite’ is even more desirable and expensive. If Luka Rajić sells Dukat, it will signal many other Croatian entrepreneurs to resolve their uncertainties as well. Starting with Ivan Čermak, who is being courted to sell Tifon. A legitimate question is: why insist that companies remain in the hands of Croatian owners? The truth is that there are quite a few foreign companies that conduct their acquisitions in Croatia quite correctly. However, as long as national states exist, one of the important levels at which the global game is played is also the game between domestic and foreign entrepreneurs. Just as in feudalism, commoners without their own nobility did not fare well, in modern capitalism, residents of countries that remain without quality and competitive domestic ‘entrepreneurial nobility’ cannot live well enough in the long term. Perhaps such an approach is utopian. Perhaps in the globalization madness where ‘private equity’ groups, institutional investors, and multinationals swallow everything in front of them in the US or EU (and how could they not do that in small countries like Croatia!), we should not expect a larger domestic entrepreneurial ‘resistance movement’. But it would be devastating if the entrepreneurial elite began to mass sell their empire and invest the earned money in real estate and land or invest abroad. Croatian entrepreneurs have a moral obligation to fight as long as they can. One of the recipes is to include institutional investors in the ownership structure, as Agrokor did with EBRD or Atlantic with DEG. Others still manage to ‘push’ on their own (Adris, Agram, Badel 1862…). All had the opportunity to sell, but they did not. They fight as long as they can. There is also a third solution: let the first generations enjoy the fruits of their labor and wait for a new generation to grow up. However, it will not have the space that was available at the beginning of the transition. Therefore, the responsibility of the first generations is greater. |
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