AAK snaps up majority stake in Russian partner Margaron
03 Mar 2020 --- AAK has acquired 75 percent of NPO Margaron LLC, a producer of margarine, spreads, and bakery and confectionery fats, based in St. Petersburg, Russia. Margaron has been a manufacturer to AAK for more than a decade and had last year revenues of approximately SEK 280 million (US$29.4 million). Through the deal, the Swedish-Danish producer of vegetable oils and fats aims to bolster its position in the Russian market. The acquisition is subject to approval from local authorities, is expected to be finalized during the second quarter of 2020.
“Russia and the Commonwealth of Independent States (CIS) countries have a population of more than 200 million people and is a highly attractive market for AAK,” says Johan Westman, President and CEO. “It is also one of the world’s largest chocolate and confectionery markets with strong potential for our Special Nutrition, Bakery and Dairy segments as well.”
“By strengthening our local footprint, we will have an opportunity to expand our product portfolio and unique customer co-development approach to the Russian market,” he explains.
Aside from entering a market with great potential, AAK will move closer to many of its global strategic accounts who have established themselves in Russia.
“AAK’s sales team in Russia has together with Margaron delivered strong regional growth over recent years,” adds Jan Lenferink, President AAK Europe. “This acquisition will enhance our customer proximity, increase our business opportunities and further grow our market share in the region.”
Subject to certain long-term targets being met, there is a put/call option under which AAK could acquire the remaining 25 percent of Margaron.
The acquisition is subject to approval from local authorities, is expected to be finalized during the second quarter of 2020 and have no significant impact on the company’s earnings. Acquisition-related costs will be charged to the first quarter of 2020.
Better-for-you bakery
With its broad process capabilities and expertise in fats and oils, AAK develops solutions to address formulation challenges of all kinds and across many industries – bakery, chocolate and confectionery, dairy, animal feed, frying, plant-based and special nutrition.
Last September, the company created several concepts to showcase the company’s fat and oil solutions that help bakers create indulgent and better-for-you non-dairy plant-based products consumers will embrace. The company’s newest global brand for plant-based foods, AkoPlanet, offers formulators a real-life solution for plant-based foods and supports AAK’s efforts to keep pace with consumers’ desires for clean label and sustainable products.
Edited by Gaynor Selby
