HOCHDORF Group Takes Over Uckermärker Milch GmbH

22 Sep 2014 --- The HOCHDORF Group has signed an agreement to acquire 60% of Uckermärker Milch GmbH as well as a 26% share in each of Ostmilch Handels GmbH, Ostmilch Handels GmbH & Co. Frischdienst Oberlausitz KG and Ostmilch Handels GmbH & Co. Frischdienst Magdeburg KG.

These investments are being made in the context of the strategic development of the Baby Care area and traditional milk derivatives. The acquisition allows the company to match production capacity to growth. Ostmilch Handels GmbH retains a 40% share in Uckermärker Milch GmbH. The acquisition is expected to be completed at the beginning of January 2015. The purchase price is to remain undisclosed.

The HOCHDORF Group has been producing infant formula since 1908, primarily for the Swiss market up to 2006. From 2006, this area has successfully shifted its focus to the international market. In recent years, sales results in the Baby Care area have shown an increase in double figures each year and existing production capacities have been fully exhausted.

The HOCHDORF Group aims to continue the growth of its Baby Care division and has been keen to expand its production capacity within the EU. Its acquisition of the Uckermärker Milch GmbH milk plant at Prenzlau, Germany, can be seen as part of this strategy. The HOCHDORF Group is acquiring a 60% share in the German company Uckermärker Milch GmbH. It is also acquiring a 26% share in the German company Ostmilch Handels GmbH and its two directly-related limited partnerships. Ostmilch Handels GmbH retains the remaining 40% of Uckermärker Milch GmbH and markets its products. "In Uckermärker Milch GmbH we have found a milk plant with a dry milk facility that we can extend for use in infant milk formula production," explains Dr. Thomas Eisenring, CEO of HOCHDORF Holding Ltd. HOCHDORF anticipates an overall investment comprising the purchase price and infant formula investments in the coming years of around CHF 20-25 million. The Group is planning to finance this via a capital increase and from its own funds. Details of the planned capital increase will be provided at a later date.

Thomas Eisenring is convinced that the EU takeover will strengthen the HOCHDORF Group's competitive position internationally. In the future HOCHDORF plans to use the plant to produce infant formula and other products for Europe and the Central and South American markets. For these markets, a production site based in Switzerland and the "Swissness" sales argument are of less significance than they are in the Asian market, for instance, explains the HOCHDORF CEO.

The acquisition of shares in these companies is subject to the approval of the German competition authorities and other customary closing conditions. The acquisition is expected to be completed at the beginning of January 2015.