RIGA - A majority stake in Putnu Fabrika Kekava, Latvia's largest producer of poultry, has been acquired by a newly registered holding company, Kopfonds, after months of buying up shares from small shareholders, according to media reports last week.
The Russian-language daily Telegraph wrote that Kopfonds, which was registered in March of this year, has managed to place its managers in both Kekava, whose turnover amounted to 6.1 million lats (9.1 million euros) last year, and Kekavas Broileri, the plant's retail arm.
In addition, Kopfonds owns Kekava's rival company, Lielzeltini, the other main producer of poultry products in Latvia.
"This is a long-term, strategic investment," Girts Rungainis, one of the owners of Kopfonds, said of the acquisition. "And in the next 10 – 15 years shareholders will not sell the enterprise."
Kekava's new owners will have their eyes on expansion, he added.
"The task of Putnu Fabrika Kekava will be to occupy a solid position on the Latvian market and to search for ways to absorb new markets in light on the new situation in Europe," Rungainis said.
Though he refused to disclose the price of the deal, Rungainis said that "the key point occurred in May of this year, when a controlling stake switched hands. The sale process is actually continuing to this day," though it would soon be completed.
No name change of the company is planned, he added, and Kekava's new owners are even likely to develop its brand name.
Kopfonds, Telegraf wrote, is owned by six individuals, including Oleg Lukin (30 percent), Boris Dolinsky (25 percent), Alexander Solomka (25 percent) and Rungainis (7 percent).
Rungainis, an investment banker, has been involved in a number of other business acquisitions in Latvia this year.
Lielzeltini would not comment on the deal until its completion, the Baltic News Service reported, while the Latvian Competition Council stated that no report has been submitted by either poultry company.
By law, the council has to approve merger deals if the new company's annual turnover exceeds 25 million lats or if both companies hold a joint market share of 40 percent.
In this case, the market share of both companies is likely to exceed 40 percent.
Kekava posted losses of 492,000 lats last year, though turnover was up 15 percent. Lielzeltini, by comparison, posted a turnover of 4.8 million lats, up 21 percent, and profits of 500,000 lats.
