Dobeles dzirnavnieks will acquire 100% of the shares of the Lithuanian grain processing company AB Baltic Mill, subject to regulatory approval in all three Baltic states.
"Expanding export markets and increasing volumes has been our strategic goal for almost 10 years. During this period, we have purposefully invested and developed production in Latvia in order to provide the local population with products and be able to meet the demand of foreign markets," said Kristaps Amsils, Chairman of the Board of JSC Dobeles Dzirnavnieks.
"It is natural that we are looking for opportunities to increase production capacity in order to be able to compete in the global market and satisfy customer requirements also in such markets where product order volumes and delivery times are quite challenging,” said Amsils, who added that strategic investments would be made in the Lithuanian operation.
"This partnership between the two food businesses will help secure a competitive advantage in Europe and enable us to offer consumers higher quality products in both local and export markets. It also means more stability for local farmers and group workers,” said Vigants Reifons, Head of Baltic Mill Group.
The move will represent a major consolidation across the Baltic region, as Baltic Mill Group includes companies in Estonia, Latvia and Lithuania in its portolio, namely UAB Malsena Plius and Amber Pasta in Lithuania, JSC Rīgas dzirnavnieks in Latvia and JSC Balti Veski in Estonia.
It is planned that the transaction will be completed by the end of this year, if competition watchdogs are satisfied that it will not adversely affect competition. The value of the deal was not disclosed.