UOHS: approved merger of Agrofert with Agropol

Prague / CZ. (div) In October 2008 the Czech Agrofert Holding filed to the Office for the Protection of Competition (UOHS) a concentration notification for the Agropol Group. Now, six month later, the Czech UOHS approved the merger of Agrofert with Agropol, but seven firms from both groups operating in five regions in the Czech Republic have to be sold, UOHS told Czech journalists.

The merger of both companies fits into the strategy of Agrofert to build a strong agriculture complex in the Central Europe which would be able to compete with big agriculture complexes thanks to the synergies decreasing the production unit costs – Agrofert-owner Andrej Babis said in October: «The possibility of the competition with the west European processors will be very probable due to the cost savings which affect mainly the feeding capacity and the poultry slaughters. The merger will enable the production specialization and the use of best practices of each group».

Agrofert has full or partial control over around 170 companies in the Czech Republic, Slovakia and Germany, for instance. According to «Prague Daily Monitor», the company´s portfolio comprises chemical firms Lovochemie Lovosice, Synthesia Pardubice and Duslo Sala, for instance. From agricultural companies, Agrofert owns Agroservis Znojmo and companies ZZN. It also controls the bakery Penam, meat processor Kostelecke uzeniny and dairy Olma.

Penam A.S. seated in Brno is the second largest producer of the bakery and milling products in the Czech Republic. It employs more than two and a half thousand employees in thirteen bakery operations and four mills and it produces more than one thousand kinds of products. It exports its products mainly to Slovakia. Penam runs a business also in Slovakia where it is the second largest bakery company with the market share amounting 22 percent.

Agrofert´s consolidated sales reached 83,4 Billion Czech Crowns (CZK) in 2007, up from 71,4 billion CZK in 2006. Net earnings reached 861,25 million CZK in 2007. Unconsolidated sales stood at 144 billion CZK last year, according to updated figures.

The Agrofert group employed some 22’000 staff in 2007. The weekly «Tyden» in August 2008 estimated Babis´s property at 50 to 60 billion CZK, which made him the second richest man in the country. The holding ranked fifth on the Czech Top 100 two years ago.