2 October 2020 – Baltic agricultural company AB Linas Agro Group has signed an agreement to acquire the KG Group of Companies, which consists of AB Kaisiadoriu Paukstynas and AB Vilniaus Paukstynas, and AB Kauno Grudai.
The total amount of the transaction was not disclosed, but Darius Zubas Chairman of the Board of AB Linas Agro Group qualified it as “very considerable”
KG Group, a Lithuanian headquartered agribusiness is one of the Baltic region’s largest manufacturers of compound feed (20,000 tonnes per month), premixes, and poultry meat. The group came into existence when AB Kauno Grudai, Kaisiadoriu Paukstynas, Vilniaus Paukstynas formed a merger in Lithuania, creating the KG Group. KG Group of Companies has 3,900 employees, and in 2019, the consolidated group's revenue amounted to EUR 563 million.
AB Linas Agro Group together with its subsidiaries, meanwhile, has over 2,100 employees. Its consolidated revenue in twelve months of 2019/20 financial year totaled EUR 658 million.
Zubas commented: “We hope that being bigger and more integrated, we will be able to compete successfully with much stronger Polish and Scandinavian companies. This will also benefit food consumers, as the variety of products of Lithuanian origin offered to them will grow. We seek to become the best food production and agricultural company in the Baltic States. We plan to pay close attention to the development of new products, modernization of production and processes, environmental protection and energy efficiency; it will also be crucial to continue to foster the values, culture and concern of employees in both organizations and to maintain excellent relationships with buyers and suppliers.”
Tautvydas Barstys, the founder of KG Group, added: “Operating in an international market, we watch how the giants of the global market merge their assets and businesses, pushing smaller companies out of the market. We understand that Lithuanian businesses also need to unite as soon as possible. Linas Agro Group and KG Group are groups of companies of a similar type and way of thinking: both are owned by Lithuanians and pay taxes in Lithuania, have a deep understanding of business, customers and employees, are well familiar to the international market and successfully operate in it. I am convinced that by joining the forces of both companies, the work I have started will be successfully continued, the companies will strengthen and even in high competition will create success stories of Lithuanian products not only in the local but in the global market as well.”
The deal, which Linas Agro hopes to complete in the spring of 2021, is subject to approval by the Competition Council.
