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FrieslandCampina ‘regrets’ Balkan dairy acquisition collapse

By Mark Astley , 23-May-2012
Last updated on 23-May-2012 at 14:18 GMT

The deal, which would have increased FrieslandCampina's presence in Eastern Europe, collapsed when an agreement could not be reached.
The deal, which would have increased FrieslandCampina's presence in Eastern Europe, collapsed when an agreement could not be reached.

Royal FreislandCampina (FC) has expressed “regret” following the end of talks surrounding the acquisitions of two Balkan-based dairy producers.

The Dutch dairy giant announced yesterday that talks between itself and the Danube Foods Group relating to the takeover of Imlek and Mlekara Subotica had ended after the parties were unable to reach an agreement on the terms of the takeover.

The firm’s latest announcement comes just months after FC entered into an agreement to acquire the two companies.

In February 2012, the company signed a Memorandum of Understanding with UK-based venture capital firm Salford Capital Partners – which owns the Danube Foods Group - to acquire the two dairy producers.

FC declined to give specific details on the reasons for the collapse in talks.

Collapse “regrettable”

“We couldn’t agree on the final terms, and that was really the only reason,” FC spokesperson Jan Willem ter Avest told DairyReporter.com. “We regret that the talks came to end so much, because we worked really hard on this deal.”

“We regret that we didn’t complete it. We hoped that we could finalise it but in the end we just couldn’t agree.”

“It is regrettable because we still think that the two firms – Imlek and Mlekara – would fit very well into FrieslandCampina.”

Despite being unable to come to an agreement, FC admitted that it would still be interested in buying the companies.

“Of course, if they came back with more acceptable terms then we would welcome them,” said ter Avest.

“We are still holding out for that, but we don’t think that will come back with a more acceptable offer in the near future.”

Accelerated growth

Despite the set-back, FC has vowed to venture on, with the aim of meeting its route2020 strategy.

The firm’s strategy includes the aim of achieving accelerated growth in selected markets.

“The south-eastern region of Europe is an important pillar of our route2020 strategy. There are still opportunities in that region and we are currently trying to seek them out to meet our strategy,” ter Avest added.

FreislandCampina already has a presence in the region, selling its products in countries such as Greece and Hungary. The attempted acquisition was part of an effort to expand its presence in surrounding countries.

Had the acquisition been completed, FC would have increased its presence in the region – exploiting Imlek activities in Serbia, Montenegro, Bosnia, Herzegovina, and Macedonia and Mlekara Subotica’s presence in Serbia.

According to a statement from FC, Danube Foods Group is still considering the possibility of further consolidation.

Elsewhere, the FC announced that its tender offer for publically owned shares of Alaska Milk Corp has been extended by 10 business days.

The extension will give those stockholders interested in the offer until 6 June 2012 to tender their Alaska Milk Corp shares.