Bittersweet about the deal: the outcome depends on the Competition Council

“There are ongoing processes and I have nothing to comment on, (…) I don’t want to anticipate myself in the eyes of someone,” T. Barštys told BNS.

He told the vz.lt portal that the negotiations have not yet been completed and that the entire KG Group will not necessarily be sold or that the buyer might not be the Linas Agro Group at all. He did not rule out that the Competition Council disapproves of the agreement.

“The problem is that we are too big for Lithuania and too small for abroad, like Linas Agro. When combined, a larger entity would make it more competitive with producers from other countries. We have been looking for a buyer for a long time to strengthen our competitiveness. And besides Linas Agro, we have other potential buyers, ”said T. Barštys.

After BNS announced that T. Barštys had doubts about the success of the future transaction, the founder of KG Group later clarified that this was not understood.

“The information in the media about my possible doubts about the outcome of the transaction was misunderstood. It meant that more potential buyers were involved in the negotiations and that various options to sell shares were being considered. However, the negotiations have now been completed, and this is confirmed by the share purchase and sale agreements signed between us and AB Linas Agro Group. However, the outcome of the transaction depends on the decision of the Competition Council, ”he said.

At the time, Andrius Pranckevičius, vice president of the board of Linas Agro Group, did not want to comment on whether there could be obstacles to the completion of the transaction, but said that the merged companies would not dominate the market. He also highlighted that KG Group had signed a contract only with Linas Agro Group.

“The fact is that the agreement has been signed and we must request it from the Competition Council and we will apply it in accordance with all procedures. (…) We understand that this is a merger, an acquisition of large companies, it will not be a simple process and, of course, there will be questions and answers and some clarifications, but that is the path we must take. (…) The agreement is only with us, the exclusive agreement, the facts are as follows, ”A. Pranckevičius told BNS.

“Of course, it’s a research question here, I don’t want to get into that, and we can’t comment much on that, but in our opinion, consumers would win this spot and there would be no dominance here,” he added.

“I have other businesses that I could do,” he said, asking what it would be like to sell the whole group.

T. Barštys is also the Chairman of the Board of Vilnius and Kaišiadorys Poultry Farms, Kauno Grūdai, Mairūnas, the Director of Kormoprom Invest, Paukštukas and Dzūkijos Agrocentro, the owner of the individual company of T. Barštis and a member of the Board of Kauno Hotel.

KG Group unites 20 companies in Lithuania and abroad.

Darius Zubas, chairman of the board of directors of Linas Agro Group, said that by acquiring KG Group, the group he will manage will be able to create a vertically integrated agri-food company, provide stability to local farmers and producers in the EU market, especially in competition with much larger Polish and Scandinavian companies. .

According to A. Pranckevičius, after the merger, the group would strengthen competition in the Baltic and Scandinavian regions.

“Within the company, we have considered the Baltic States as a local market for many years, because our countries are small, there are no borders and companies compete in all the Baltic States. More generally, Poland, the Baltic States and parts of Scandinavia are an area of ​​fierce and transparent competition. From a regional point of view, we are not and will not be bigger and more dominant, ”A. Pranckevičius told BNS.

Linas Agro Group has signed agreements with the shareholders of Kauno Grūdų, Kaišiadorių paukštynas and Vilniaus paukštynas in relation to the acquisition of controlling interests.

The transaction is expected to be completed in spring 2021. According to the valuation provided by some SNB experts, the value of the transaction could reach 100-120 million. euros.