Vivartia Announces Agreement to Acquire MEVGAL

The merger of the two companies is estimated to have a positive effect in the Company’s activity in the dairy sector, due to the synergies expected to arise both in sales and distribution networks, as well as in supply chain and production of our products.

Sep 2 2010 --- VIVARTIA S.A. announced a preliminary acquisition agreement with the Papadakis-Chatzitheodorou family, which holds a 43% stake in MEVGAL S.A.  In conjunction with the existing agreement between VIVARTIA and the family of Mary Hatzakou, the agreement allows, subject to approval by the Competition Commission, the acquisition of at least 57.8% of MEVGAL S.A. by VIVARTIA through its 100% subsidiary DELTA FOODS S.A.

The acquisition will be completed in two phases: (a) immediately after the approval of the amendment of Article 8 of the charter of MEVGAL S.A. concerning the transfer of shares, DELTA FOODS S.A. will acquire 14.8% of MEVGAL S.A. from the family of Mary Hatzakou for a consideration of approximately €19.6 million, while the latter will retain a put option on VIVARTIA for a further 13.6% stake, and (b) subject to the necessary approval of the competent competition authority, DELTA FOODS S.A. will acquire an additional 43% from the Papadaki-Chatzitheodorou family at the price of €57 million.

The agreement with the Papadakis-Chatzitheodorou family foresees that, following its completion and given the intention of merger between DELTA FOODS S.A. and MEVGAL S.A., the Papadakis-Chatzitheodorou family will have the right of a minority participation in the new partnership.

MEVGAL S.A. has had a presence in the dairy sector since 1950 and today holds its position as the number one dairy company in Northern Greece.  Its turnover in 2009 amounted to €184 million and EBITDA represented approximately €11 million.

The company that will be created following the merger of DELTA and MEVGAL will boast total combined sales of €640 million, of which approximately €500 million will be in Greece, with the remaining €140 million from abroad.

The merger of the two companies is estimated to have a positive effect in the Company’s activity in the dairy sector, due to the synergies expected to arise both in sales and distribution networks, as well as in supply chain and production of our products. The expected synergies are expected to reach, over a three year period, €23 million on an annual basis.

Mr. Dionysios Malamatinas, CEO of VIVARTIA Holdings S.A. commented: "We are very pleased with the acquisition agreement with MEVGAL, a renowned company in the Greek dairy industry with a truly long history and significant presence. Our goal is to give greater value to the new partnership and to our consumers the benefits of creating a national champion, while maintaining the course of growth, innovation and quality that characterizes both companies. This new business combination has the ability to overcome the current competitive challenges and is expected to contribute significantly to the maintenance as well as to the strengthening and development of Greek farming and the economy of our country."

The President of MEVGAL S.A., Mr. Petros Papadakis said:
"Amidst highly competitive conditions, the sector is now ripe for partnerships and a combination of forces in order to face growing consumer demands, challenges of the domestic market and growth opportunities in Southeastern Europe. These conditions demand increasingly stronger and more competitive formats.

The values that both companies (DELTA and MEVGAL) share, the culture of our people and the fact that our activities complement each other were the foundations upon which our business decision was formed. We are confident that this action will be rewarded with complete success and will hold multiple benefits for our companies, our people, our consumers and the wider society in which we operate”.