Pipunić Takes Over Zvijezda: Žito Group Agrees to Purchase

The Osijek-based Žito Group, owned by Marko Pipunić, is acquiring the Zagreb oil factory Zvijezda and Zvijezda Slovenia, as announced on the Zagreb Stock Exchange. This confirms the report by Lider from September 26 of this year, which stated that Žito Group is negotiating the acquisition of Zvijezda.

According to the announcement on the Zagreb Stock Exchange, at today’s meeting of the Supervisory Board of Žito, consent was given to the Management of the company to conclude a negotiated purchase agreement for 100 percent of the business share in Zvijezda plus and the Ljubljana Zvijezda Podjetje za notranjo in zunanjo trgovino from the company Fortenova Grupa d.d.

– This transaction further strengthens Žito Group’s position in the regional food industry market and expands its portfolio of products and production capacities. We believe that the synergy between the existing production facilities of Žito Group and Zvijezda will contribute to even greater efficiency, innovation, and competitiveness in the market. We thank Fortenova Group for their trust, as well as everyone who participated in the realization of this significant transaction – stated Pipunić in a joint statement issued by Žito Group and Fortenova Group.

He added that Žito Group has always been originally focused on growth and development, and now with Zvijezda, it gains additional strength and breadth for a new leap in the areas of brands, production, and market positions. He is confident that the company will seize this opportunity to create long-term value for all stakeholders: employees, shareholders, and the community.

The purchase agreement defines the conditions and actions that Žito and Fortenova Group are obliged to fulfill as prerequisites for the completion of the transaction, including, among other things, obtaining concentration approval from the Competition Protection Agency.

The final purchase price is expected to be determined upon the completion of the transaction, in accordance with the agreed price determination mechanism, depending on the achieved financial results and operations of Zvijezda plus up to the date of completion.

Recall that Lider stated nearly two months ago that Žito Group could acquire Zvijezda plus for around 100 million euros, or that negotiations are ongoing regarding a price range of 90 to 120 million euros.

According to the published plan, ahead of Žito’s IPO, in the next three years, Žito Group plans to invest 125 million euros for investments and acquisitions for the purposes of organic and inorganic growth. However, with this acquisition of Zvijezda, almost all of it would go towards that acquisition. Perhaps that is why Pipunić decided to sell 23 percent of the ownership stake in the Oil Factory Čepin (TUČ) to the company Equinor Limited, registered in the Cypriot capital Nicosia.

Vertical Integration

The company owned by Marko Pipunić stated that Equinor – which has the same name as the Norwegian oil company – acquired just under 882 thousand shares in TUČ. The purchase price was not disclosed. This transaction was revealed in the prospectus accompanying Žito’s stock market debut last summer. Recall that in the most valuable public offering of shares in the domestic stock market history, Žito raised over 130 million euros in capital from 4,200 investors.

In any case, Žito Group will gain vertical integration with this acquisition, as Joško Vučetić, a partner at the consulting firm Caper, told us just under two months ago. With the Oil Factory Čepin in its ownership, it is already the largest Croatian processor of oilseed grains with an annual processing capacity of about 150 thousand tons. By merging with Zvijezda, it also gains leading national brands, distribution, and categories with higher margins (mayonnaise, margarine, etc.).

In addition to vertical integration, Žito would expand its portfolio with premium and mainstream brands and the only domestic production of mayonnaise and margarine in significant series. They would also gain regional expansion, control over input prices, and inventory optimization, Vučetić believes.

On the other hand, Zvijezda would gain a more stable supply of raw materials and cheaper inputs, reduced dependence on the import of crude oil, and additional production capacities, i.e., the ability to utilize consolidated production capacities. Fortenova, on the other hand, would receive much-needed funds for refinancing obligations and implementing its portfolio divestment strategy.

– Zvijezda is the largest producer of edible oils in Croatia, has strong brands, product categories with better and higher margins, and strong distribution. On the other hand, the Oil Factory Čepin is the largest processor of crude and refined oils, has more “commodity” brands (Tena), and a strong domestic raw material base – says Vučetić.

He emphasizes that consolidation creates a serious player that covers almost the entire value chain and two basic price levels of products – brand and “value” segment. – Consolidation will create a larger and more efficient national leader that will have greater market power in negotiations with retailers and suppliers. Integration can also bring operational synergies (logistics, procurement, inventory, etc.) and consequently stabilize prices on the shelves – believes Vučetić.

Continuation of the Process at Fortenova

Fortenova emphasizes that according to relevant research tracking sales and brand strength perception, Zvijezda is a leader in all key product categories and an absolute star on the brand strength ranking in Croatia. Even five of Zvijezda’s brands, they emphasize at Fortenova, have been positioned among the ten strongest brands for years, with Zvijezda oil and Zvijezda mayonnaise regularly alternating in the first and second places on that list. Such consumer loyalty, the brands of the company Zvijezda primarily owe to their quality, tradition, innovation, and originality.

In 2024, Zvijezda achieved a realization of 84 thousand tons of finished products and generated revenue of 155 million euros, and the company currently employs more than 440 employees.

– Exiting this activity is a continuation of the process that Fortenova Group started with the sale of companies that had agricultural production. As in all previous divestment processes, our focus in this process was also directed towards finding those partners who, in addition to paying a fair price, would make the maximum contribution to the further development and preservation of employment, tradition, and market position that Zvijezda has.

Therefore, the finalization of this transaction is the result of our belief that Žito Group, which has a domestic raw material base and technological excellence, is the most natural environment for Zvijezda, in which this company, along with its expert and personnel potential, focused management, and developmental vision, will gain new momentum. At the same time, we further strengthen the partnership between two large regional companies. We are grateful to all colleagues in Fortenova Group and Zvijezda, as well as in Žito Group, who worked hard to enable the realization of this transaction. This transaction has additionally financially strengthened Fortenova Group and created the foundations for its further growth – stated Fabris Peruško, a member of the Management Board and CEO of Fortenova Group.