Podravka’s acquisition of Fortenova’s agro business is a political decision. And an expected one. With these words, economic analysts, market experts, and M&A specialists commented on this morning’s announcement that Fortenova has chosen Podravka as the buyer of its agricultural companies, Belje, Vupik, and PIK Vinkovci. Few wanted to publicly comment on the news under their own name. They emphasize that Podravka clearly made the best offer and remind that the agro business is not unfamiliar to the Koprivnica company.
Damir Novotny, an economic analyst, states that the announcement of Podravka buying the agricultural business, which is linked to a significant amount of land in Baranja, is a better option than the alternative. It is simply important, he reminds, that this land remains in the hands of Croatian business. Another point Novotny draws attention to is the fact that the main unknown in this story is now Podravka’s strategic direction, as Podravka previously had its agricultural company Podravsko gospodarstvo, which it disposed of 25 years ago during the transition when the company changed its strategic direction.
– It seems that Podravka is changing its strategic direction, which until now has been the production of certain food products and pharmaceuticals, and is now entering the agricultural business, which will not be a total unknown for it, although there will be open questions that will need to be addressed as soon as possible – emphasizes Novotny, adding that he means whether Podravka will transform the crops grown by Vupik, which relate to grains for animal feed, which do not have high value.
Podravka does have its bakery business, so it would be more logical, he believes, for them to grow grains for that industry, and besides that, Podravka will now also be engaged in livestock farming, which all represents a certain risk, Novotny warns, that the strategic focus may be lost.
When asked about the concerns of many unnamed experts who did not want to comment publicly, regarding how Podravka will finance this transaction and how it will affect results, Novotny states that there is no room for fear.
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– EIB will gladly finance Podravka, and shareholders will support it – believes Novotny, who thinks this will not be an excursion into the unknown for Podravka.
And the CEO of Podravka, Martina Dalić, also emphasized in her LinkedIn post that, in the case of successfully completing the acquisition of Belje, Vupik, and PIK, they expect their minority partner in this business to be the European Bank for Reconstruction and Development.
The Largest Offer
Dragan Munjiza, a business consultant, is on a similar track, noting that the good thing in the whole story is that Podravka knows the market.
– What can also be highlighted is that there will no longer be a discussion about how foreigners will take over the most fertile Croatian land – said Munjiza.
It is worth recalling that HPS Investment Partners, an American investment firm and one of the largest creditors of Fortenova, was a sort of controller in the process of selling the company’s agricultural portfolio, which Pavao Vujnovac, the majority owner of Fortenova, confirmed in a recent interview with domestic media.
– They have an interest as the largest creditor because that money goes to them. Their interest is for the offer that is ultimately accepted to be the largest – Vujnovac revealed at that time.
The public immediately began to speculate that the sale of “agrija” to the Hungarians, i.e., the Meszaros Group, was a done deal, as it was whispered in numerous corridors that they had submitted the largest offer for Belje, Vupik, and PIK Vinkovci, but this morning it was announced that the largest offer was made by Podravka, amounting to 330 million euros.
– The Fortenova group assessed Podravka’s offer as overall the best. Accordingly, an exclusive negotiation agreement was signed between the companies based on which the Fortenova group will continue the negotiation process for the conclusion of the purchase agreement only with Podravka – announced Fortenova, explaining that detailed analyses of the received binding offers showed that Podravka’s offer, besides being the highest in price, also best meets the criteria of the most desirable strategic partner for these companies set in the transaction.
– The selection of Podravka as the preferred buyer in this transaction and I believe its successful completion once again confirms the correctness of the ambition and determination of the Management to lead the Podravka Group on the path of growth in financial results while taking into account the material position of workers, consumer satisfaction, and responsibility towards the community. Without that, we would not be able to participate in this transaction as the leading and preferred buyer. Therefore, it is our obligation as Management to continue to lead the Podravka Group in this way, which, in the case of successful completion of this transaction, will exceed the threshold of one billion euros in revenue – for the benefit of all current Podravka employees and those who will become so – Dalić wrote today on her LinkedIn profile.
