ACQUISITION: Agrokor Acquires Mercator – Largest Retailer in CEE

On Friday, Agrokor signed a purchase contract with the ownership consortium of Mercator that consists of 12 shareholders, acquiring 53.12% of Mercator’s shares at a price of €120 per share. Agrokor will pay €240 million for the majority share, which values the Slovenian retailer at €452 million.

This acquisition is a result of a long negotiation process that lasted several years. It was finally realised after the last key shareholder, Lasko Brewery, agreed to sign the above-mentioned purchase contract on Friday. The contract was also signed by 11 other Mercator shareholders and creditors, including  Hypo Bank, New Ljubljana Bank, Union, Radenska, etc.

It is forecast that the new company will generate yearly revenues of €1 billion and employ more than 60,000 people. It will also become the largest retailer in Central and Eastern Europe, making it a relevant economic actor on the EU internal market. Ivica Todoric,  owner of Agrokor, stated that this is a historic breakthrough that will create a platform for both companies to increase their financial stability, economic efficiency and competitiveness.

Agrokor’s acquisition also presents a victory of business over politics. In particular, the struggle of Slovenian politicians to protect the so-called ‘national interests’ of Slovenia using political pressure on Mercator’s shareholders and management resulted in a considerable decrease of Agrokor’s offer by €400 million compared to what the company offered in 2012. Due to the economic crisis in Slovenia, the Slovenian government has eased its protectionist stance on the privatisation of Mercator, which resulted in this successful transaction.

However, the process is not completed yet. Agrokor still has to get approval from the authorised regulatory agencies of the countries where Mercator and Agrokor’s retail company Konzum are present. Furthermore, Todoric has to resolve the problem of Mercator’s considerable debt that amounts to €1.1 billion. Therefore, the transaction cannot be realised without some form of recapitalisation. If both issues are successfully resolved, the acquisition, along with the transfer of the remaining shares to Agrokor, could be finalised by the end of this year…

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