On June 7, 2023, the AUGA Group (VSE: AUG1L) and its subsidiaries – Baltic Champs, UAB, UAB “AUGA Luganta“, Kooperatinė bendrovė “AgroMilk“, Kooperatinė bendrovė “Juodmargėlis“, and Kooperatinė bendrovė „Šventosios pievos“ (collectively referred to as the Seller) – entered into an agreement with Kauno Grūdai AB, a member of the Linas Agro Group (the Buyer). This accord sealed the sale of 100% of shares in Kooperatinė bendrovė “Grybai LT“ (the Company).
Upon fulfilling all conditions outlined in the agreement, the Seller and the Buyer confirmed the deal’s completion on July 21, 2023. This development saw all Company shares transfer to Akcinė bendrovė “Kauno Grūdai”, marking the full transition of ownership. The Seller received a total of EUR 16,327,365.26, including EUR 12,948,612.14 for the Company’s shares and an additional EUR 3,378,753.12 repayment of a loan previously owed to Baltic Champs UAB.
Given the Company’s gross revenue in the Republic of Lithuania in 2022 did not reach the threshold of EUR 2 million, set out in Article 8 of the Lithuanian Competition Law, the Buyer did not need to apply to the Competition Council for a concentration clearance.
The Company, now under new ownership, produces organic ready-to-eat products such as soups, canned vegetables, stews, and grain bowls. These goods are exported to 30 countries, including major organic markets like the United States, Germany, and Japan. The Company’s revenue accounted for 8.9% of the total revenue of the AUGA Group and its subsidiary companies in 2022.
Following an agreed transition period of 18 months, products will be rebranded from AUGA to a different brand name. Despite the transition, consumers can continue to find their favored food products on the shelves.
“We are delighted with the success of the transaction,” said Kęstutis Juščius, CEO of AUGA group, AB, adding that the business sold no longer aligns with AUGA’s strategic vision of fostering agricultural technologies and providing everyday consumer products with a lower environmental footprint.
Juščius affirmed the Group’s ongoing commitment to developing emission-reducing agricultural technologies, expanding sustainable farming, and strengthening a new category of more sustainable organic products, which are grown in farms adhering to AUGA’s sustainability standard.
The finalized transaction is set to boost the Group’s 2023 results, expected to enhance AUGA group’s consolidated profit by about EUR 7-8 million. Proceeds from the sale will be used for general corporate purposes, partial coverage of obligations, augmentation of working capital, or financing approved projects. The final decision on the use of funds will be made by the Group’s management in the third quarter of 2023, post the harvest season.
Image provided by the AUGA Group
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