With the help of Prudentia one of the largest dairy processing companies in the Baltics - Food Union - was established
In 2011 the strategic investor Andrey Beskhmelnitsky bought one of the largest dairy processing companies in Latvija - Rīgas Piena Kombināts. With that A. Beskhmelnitsky started the consolidation of Latvia's dairy processing industry. After acquiring the company the investor changed its focus to creating a higher value added and started exporting more. In this deal Prudentia was on the sell-side.
Shortly after that, at the end of 2011, another dairy processing company with a strong brand was purchased - Valmieras Piens. Continuing the consolidation process and increasing the effectiveness of the milk processing industry, Rīgas Piena Kombināts and Valmieras Piens were merged in the beginning of 2012. With this merger the Food Union group was created. In this deal Prudentia represented the buyer and consulted in the merger transaction.
The most recent transaction in Latvia was the addition of Rīgas Piensaimnieks, to the group. The deal was closed in autumn 2015 and the transaction had to be approved by Latvia's and Lithuania's competition authorities. In this transaction Prudentia consulted the buyer.
Kārlis Krastiņš: Food Union is a great example of market consolidation in Latvia
The Food Union Group can be highlighted as a great example of how to consolidate the market and expand internationally in Latvia. The merger of Rīgas Piena kombināts and Valmieras Piens in 2012 created one of the largest players in the dairy processing industry in the Baltics by reaching the total sales of almost 250 million euros in 2016. In such a short period of time, this expansion was made possible through M&A transactions. Without the already mentioned deals in Latvia, in which Prudentia acted as an adviser, Food Union has completed several other transactions abroad, for example, in Estonia, Denmark, Norway, Romania and Belarus. Additionally, the company has managed to expand in China, which indicates that the company is thinking of a global expansion.
Overall the story of the Food Union can inspire other companies and manufacturers in Latvia and it serves as a great example of how with a thoughtful M&A strategy you can achieve big goals in a relatively short period of time. We are very proud that Prudentia was involved in creation of such a successful group.