Glenboden M & A Originations

Croatian dairy teed up for sale after divesting soft drinks business

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Origination Status company acquisition agreement reached
Asset Eurobev (Croatia), leading local producer of soft drinks incl. PepsiCo carbonated drinks licencee
Buyer Bandel 1862 (Croatia), local wine & spirits producer
Seller Lura (Croatia), local dairy group
Buyer Rationale to enter growing Croatian soft drinks market
Seller Rationale to divest a non-core subsidiary, focus on dairy business
NBs Bandel beat Croatian giant Podravka in the bid to acquire Eurobev
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It seems to us that Lura, latterly called Dukat, as a dairy producer, is forgoing strategic opportunities by selling its soft drinks business, certainly the fruit and nectars part of it - the chilled shelf will evolve beyond yoghurts and homo cheeses, as Croatians get richer, and there’s nothing healthier than fruit. It might be that this sacrifice was motivated by the need to present Lura as a pure-play dairy business, to a major strategic dairy buyer. Candidates include Lactalis.

Surely can’t have been a bargain, if Podravka was also a bidder. Podravka is a large and diversified pan-CEE business which has the EBRD as a shareholder. Then there’s the fact that Podravka probably had synergies to add to their price proposal, as an existing producer of soft drinks. Maybe Bandel got carried away with the prospect of having a ‘platform’ to take them out of ‘unhealthy’ alcoholic drinks? Or perhaps the Pepsico licence jarred somehow with Podravka’s own brands?

Interesting also how juice and nectar businesses, these days, invariably seem to get sold to local or regional players, rather than to multinationals. One knows that tetra bricks even look like commodities, but certain segments of this market have strong growth and strategic potential. We predict that the global majors will re-kindle their strategic interest in fruit juice acquisitions in the near future.

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