The excessive connection between politics and the economy, along with the reluctance towards foreign capital, are the main reasons why Slovenian companies have transformed from a strong investment player in the region into ‘prey’, leading to Agrokor now buying Mercator instead of the other way around, according to business consultant Borut Šuklje, a former minister in several governments of Janez Drnovšek, and later Slovenia’s ambassador to Belgrade, as stated in the Maribor newspaper Večer on Monday.
Mercator, over a decade ago, had significant political support for conquering retail markets in the region, as well as support from domestic and even European banks, but it lacked an appropriate ownership profile as it was perceived as a state company in a country unwelcoming to foreign capital.
Šuklje presented a case from the time when he attended confidential negotiations in Belgrade as an ambassador, where Mercator wanted to partner with Delta of Miroslav Mišković, with the intention of jointly acquiring the Serbian retail chain C market, after Mercator opened the largest shopping center in the region in Belgrade. Šuklje claims that everything was fine while negotiations were at the political level, but it fell apart when Mišković, in a meeting with then Mercator director Zoran Janković, gave an unexpected response and rejected the offer.
Mišković was very direct, telling Janković that he was the owner of Delta, and Janković was merely the director of Mercator, and that they could discuss this when Janković became the owner of the company he led. “When Milan Kučan is no longer the Slovenian president, you will no longer be the director of Mercator either,” Mišković reportedly said, according to Šuklje.
At that time, the state was indirectly the largest owner in Mercator’s ownership structure, while about 30 managers, including Janković, owned a small package of shares that they had purchased in 1998 for 5,500 then Slovenian tolars per share, which is equivalent to about 23 euros.
Šuklje argues that it has proven to be a significant mistake that some of the eight previous attempts to sell Mercator’s shares appeared unserious, leading some foreign investment funds to perceive it as ‘a joke in which it is not good and cheap to participate’. This was the time when the prestigious Belgian retail chain Delhaize bought Mišković’s Delta in Serbia for nearly one billion euros, while now Mercator is entirely valued at 420 million euros, according to the contractual share price reached in negotiations with Agrokor, which was the only strategic investor to respond to the last tender, Šuklje warned.
He claims that the late Janez Drnovšek, with whom Šuklje was very close, skillfully ensured that there was no excessive and rapid opening of the domestic market to foreign investors, but that everything later took on unforeseen dimensions as domestic managers, wanting to privatize the companies they led with capital from domestic banks, had political support. Drnovšek, Šuklje notes, managed to convince Brussels that Ljubljana’s Petrol had the strength and knowledge to develop gas stations during the construction of highways, thus rejecting the multinational company Shell, but later lobbying groups connected to politics rejected foreign capital in several cases under the guise of ‘protecting national economic interests’. Thus, the attack by the Belgian brewery Interbrew, which first bought the Ljubljana brewery Union but later sold the shares to Pivovarna Laško (PL), was ‘rejected’.
