On 7 June 2023 AUGA group have signed an agreement on the sale of the soup and canned products production unit Kooperatinė Bendrovė “Grybai LT“ with Kauno grūdai.  The transaction will be completed only if the permission of the Competition Council to carry out the concentration is obtained, the consent of the bank financing the “Grybai LT“ and other preconditions usual for such transactions are met. 

The sale price of  “Grybai LT“ shares will be calculated on the closing date in accordance with the formula set out in the agreement, taking into account the Company’s current financial data as at the closing date, including the Company’s working capital, financial debt, cash and transaction-related expenses.  

“Grybai LT“ was established in 2012 to process mushrooms grown in Lithuania. Since 2016, “Grybai LT“ has been producing ready-to-eat products such as soups, canned vegetables, etc. in a modern automated factory and has been continuously expanding its product range. 

“We have successfully created and developed a completely new business segment, and a category of ready-to-eat soups, which was almost non-existent in Lithuania, even though we were not food processors and had no experience in food production before. We started from scratch – from the idea, to the selection and implementation of the necessary production technologies, to the development of products and search for new markets. Thanks to our team and its consistent work, today “Grybai LT“ products are available in 30 countries around the world. We are pleased that we have managed to attract the attention of consumers not only in Lithuania, but also to enter the world’s leading markets for organic products such as: United States of America, Germany, Japan, and to establish ourselves in them”, – said Kęstutis Juščius, CEO of AUGA group. 

“Grybai LT“ soups and other end-consumer-products are marketed under the AUGA brand and private labels. Although many consumers associate the AUGA brand with these products, end-consumer-products account for only up to 10% of the revenues of the AUGA group. 

“Although the products have been successful and recently “Grybai LT“ that produces them has been growing its turnover by around 30% annually and has been profitable, we have taken the decision to exit and sell this well-developed business. Over the last 2-3 years, AUGA group has found a way to tackle the largest sources of emissions in agriculture through technology. By solving them, a new category of sustainable food with “no cost to nature” is created. These products will be made exclusively from raw materials grown on farms that apply AUGA sustainable farming standard. The new dairy and cereal products under the ‘mission no cost to nature‘ label are already available to consumers in Lithuania. In the future, we will seek to expand abroad not by exporting packaged products (as produced by KB Grybai LT), but by providing technology and working with local farmers and processors to bring the products with no cost to nature to consumers in other countries. AUGA will create and develop a new category in food and will become synonim for sustainable food,” says Kęstutis Juščius, CEO of AUGA group. 

 AUGA group plans to further expand the range of the new “no cost to nature” product line and continue building the AUGA brand. 

“We believe that the sustainable food category is several dozen times bigger than the one “Grybai LT“ has been producing so far, and AUGA is demonstrating leadership in it,” adds Kęstutis Juščius, CEO of AUGA group.  

Consumers will still be able to find their favourite soups, canned vegetables and other food products on the shelves, but in the future these products will be branded not under AUGA but different brand name. 

Commenting on the transaction, Darius Zubas, Chairman of the Board of Linas Agro Group, said: “Our ambition is to grow by diversifying our activities, and the most attractive seems to be the development in the food segment. We have not yet had any ready-to-eat product groups in our product range, nor have we had any organic food products. Following the acquisition of Grybai LT, we will expand our product range with three new product groups. Organic products will not only complement our product range perfectly, but will also take us into markets such as the USA and Japan, where „Grybai LT“ has made significant inroads. We see an opportunity to increase production and clear synergies with our other activities.” 

“We are delighted to be able to put the business we have developed in good hands. The new owners of “Grybai LT“ will be able to leverage their experience and synergies with their other activities to expand in the existing markets and reach even more export countries, creating value for the Company, its employees and the entire Lithuanian economy”, – says Kęstutis Juščius, CEO of AUGA group. 

The proceeds from the transaction will be used for general corporate purposes of AUGA group. As previously announced, AUGA group plans to raise new capital and additional funding for the development and expansion of the technology branch.