Today AUGA group, AB signed share sale and purchase agreement to acquire 100% share capital of UAB Raseinių Agra for EUR 2.5 million. After the deal is completed, the area cultivated organically by AUGA group companies will increase by 5.2 thousand hectares of rented land.
UAB Raseinių Agra was established in October as a result of spin-off procedure from UAB Agra Corporation, shareholders of which decided to withdraw from agricultural business and to concentrate in the area of investment property management. All assets related to the agricultural business (buildings, machinery and equipment), working capital, EUR 3.9 million of financial liabilities, land lease contracts were transferred to the newly established company, also land under UAB Agra Corporation ownership were rented to UAB Raseinių Agra on the long-term lease agreements. UAB Raseinių Agra does not own any agricultural land.
After the spin-off UAB Raseinių Agra will cultivates 5.2 thousand hectares of rented land. Before reorganization UAB Agra Corporation group companies cultivated this land with annual production of around 25 thousand tons of various grains.
“This acquisition will enable us to increase the volume of organic production for end users in the future. By 2019, we plan to finalize the organic certification of all the land rented by Raseinių Agra,” says Linas Bulzgys, CEO of AUGA group.
According to him, this acquisition will help AUGA group to reach its strategic goal of providing organic food products at affordable price to consumers in Lithuania, Europe and other regions, effectively utilizing production methods and controlling processes from field to shelf.
“This acquisition will increase our resources for production and will allow us to use the production and human resources of both companies even more efficiently. Most of the cultivated land used by the acquired company is close to our organic farming areas in Raseiniai and Jurbarkas regions, thus we will be able to efficiently integrate this new company into AUGA group, including all of its currently employed 33 people. After strengthening our production base, we will be in a very solid position to meet increasing demands for organic products both locally and internationally,” adds L. Bulzgys.
The acquisition should close upon receiving the necessary approval from the Competition Council of the Republic of Lithuania.
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