It Would Make Sense and Logic for Badel 1862 to Acquire Agrolaguna

Although there is currently no confirmation or denial from either Fortenova or Badel 1862 regarding the news published by Jutarnji list that the largest domestic producer of alcoholic beverages is acquiring Fortenova’s company Agrolaguna from Poreč, the potential transaction sounds quite logical. Badel 1862 is indeed in an acquisition and investment surge, while Fortenova is in the process of divesting to reduce its debt level and improve its debt-to-profit ratio.

Since emerging from pre-bankruptcy settlement in 2018 and entering the ownership of Meteor Group – Labud, Badel 1862 has, in every respect, returned its business to its former glory and positioned itself as a consolidator of domestic wine and spirits production. In the last four years, Badel 1862 has acquired and integrated the strong alcoholic beverage brands Dalmacijavina into its system, as well as the umbrella brand and all wine and vinegar brands of the Split company, and Vinoplod-winery Šibenik, which it also saved from bankruptcy. Moreover, the former brands of wine and spirits from Dalmacijavina are now bottled in the facilities of Vinoplod in Šibenik. Last year, Badel 1862 became a strategic investor in the Zagreb craft distillery Duh u boci, whereby Badel took over the distribution of their products, while Duh u boci continues independent production and other business segments.

Agrolaguna, the largest food company in Istria, produces wines under the brand ‘Vina Laguna’, olive oils ‘Ol Istria’, and indigenous Istrian cheeses under the brand ‘Špin’. As part of Fortenova, formerly Agrokor, its brands have secured good shelf space in Konzum and Mercator, making them well-known in all markets where these retail chains operate. However, despite having quality and well-known brands, Agrolaguna, according to available data ending in 2023, has not been able to operate in the profit zone since the collapse of Agrokor.

With around twenty million euros in revenue generated in 2023, Agrolaguna is not a large company in itself, but with accumulated losses totaling more than eight million euros from 2019 to 2023, it has become a significant burden for Fortenova. Given these business results of Agrolaguna, its sale will not significantly reduce the existing debt for Fortenova, but the sale of Agrolaguna will positively affect the improvement of the debt-to-profit ratio, which is an obligation to the creditor, the American fund HPS Investment Partners, that must be fulfilled by the end of this month to avoid having to sell one of its flagship companies, Konzum and Mercator or Jamnica.

Thus, the currently unconfirmed and unrefuted transaction between Badel 1862 and Fortenova would indeed make sense. A pure win-win situation.