CPF plans to acquire food processing firm in Russia

There are two deals under negotiation. The negotiations follow CPF board approval yesterday for the company’s wholly owned CPF Netherlands to acquire an integrated poultry business in Russia |from Agro-Invest Brinky for |around US$680 million (Bt23.7 billion).
CPF already has a livestock-feed and swine-farming business in Russia.
The planned acquisition of the food-processing business there would add value to both its swine business and the upcoming poultry business, Adirek said.
The acquisition deal with Agro-Invest will be completed in two transactions.
In the first transaction, CPF Netherlands will acquire all of the shares of a new Russian company to be set up by Agro by August 31. Before completion of this first acquisition, the Russian company will acquire 80 per cent of the shares of CJSC Poultry Parent Stock Production Woyskovitsy and of CJSC Poultry Production Severnaya. Woyskovitsy and Severnaya run an integrated poultry business in Russia.
The first acquisition is expected to occur before the end of this |year.
In the second transaction CPF Netherlands will acquire the remaining 20 per cent of Woyskovitsy and Severnaya. The second acquisition is expected to be completed on August 31, 2018.
Woyskovitsy and Severnaya together generated consolidated revenues last year of around Bt10.22 billion and net income of more than Bt3 billion.
Their combined business is one of the top five poultry producers in Russia with a market share of around 5 per cent.
Revenue from this integrated poultry business in Russia would come in the fourth quarter this year and the deal is expected to break even in five years, Adirek said.
The company has set aside an annual investment budget of about Bt20 billion, mainly to finance overseas business expansion, excluding acquisitions.
CPF has operations and investment in 14 countries and exports to more than 40 countries across five continents.