Hungarians Allegedly Offered the Highest for Fortenova’s Companies. Analysts: This Has Nothing to Do with Business!

By mid-June, we should find out whether Fortenova’s agribusiness, namely the companies Belje, Vupik, PIK Vinkovci, and Vinka, will get a new owner. In the game, after the submission of non-binding offers, are only three companies that are currently in the process of due diligence. Fortenova is interested in Podravka, which has been considered from the start as ‘the most logical and desirable buyer’, and the Žito group consortium from Osijek owned by Marko Pipunić and Đakovo’s Osatina owned by Mirko Ervačić, which surprised many stakeholders in the domestic business with their offer.

Both Podravka and the Slavonian consortium are reportedly offering around 300 million euros for Fortenova’s agribusiness, which is far less than the alleged offer from the Hungarian Mészáros group, owned by the richest Hungarian, entrepreneur Lőrinc Mészáros, a close friend of Viktor Orbán, which is closer to half a billion euros. What can be concluded from all of the above is that the government’s plan for Podravka to become the owner of Fortenova’s business in such constellations is quite uncertain, although not entirely impossible.

Žito and Osatina act as serious bidders. Their plan, at least as rumors suggest, is for Žito to take over Belje and Vupik, while Osatina would ‘get’ PIK Vinkovci, i.e., the cultivation of fruits and vegetables. However, how both companies will finance the takeover is still not entirely clear, so it is not surprising that there are whispers in the business community that they may have a third partner.

Half a Billion Just for Land?

The Hungarian offer has caused far greater astonishment in the domestic business community. Fortenova’s agribusiness, which has not been invested in for years and is just waiting for a fair investment boost, is reportedly not worth half a billion euros. Not even close! Economic analysts and experts familiar with the Croatian M&A scene, as well as business consultants with whom Lider communicated about this transaction, all emphasize that the Hungarian offer in this specific case is ‘everything but business’. Half a billion euros for outdated technology and low yields, but for arable agricultural land that is under concession, is a message, they believe, from one government to another. Especially since Lőrinc Mészáros is very close to Orbán.

– Since that offer has nothing to do with business, the decision about the buyer will likely not have anything to do with business either – emphasizes one of Lider’s sources.

Shameless Figure

Neither the management of Fortenova nor the government (at least not the one led until recently by Andrej Plenković and in which the Homeland Movement was not present) is particularly happy about the fact that a foreigner is interested in companies that have concessions on large areas of arable land in eastern Slavonia, nor that they are offering such a shameless figure.

And the fact that this offer is allegedly conditioned on the extension of concessions, and that for a much longer term, has set off all alarms. After all, Slavonian and Baranja politicians, as well as those from Markov trg, are well aware of the support that members of the Hungarian national minority in eastern Croatia receive from the Hungarian government, both for land and for agricultural production. Whether so much arable land should be handed over to the control of another state is certainly not just a question that business should answer.

To seemingly maintain good neighborly relations between Zagreb and Budapest, an operation has reportedly begun to support domestic entrepreneurs in taking over Fortenova’s agribusiness. This operation involves the domestic financial sector, which has been tasked with devising a plan to take over the companies from Fortenova’s portfolio and to create the impression that investments are being made in them just enough not to jeopardize the operations of those who are the bearers of this transaction. If this involves cooperation between Podravka, Žito, and Osatina, that is also reportedly on the table.

How serious this plan is should be known in a week or so when the due diligence is completed. Due to the confidentiality agreements that are a usual part of this process, neither party can disclose details.