RIGA - Last week it was announced that Cido, the popular maker of fruit juices and preserves, will be bought by the Danish Brewery Group in a deal that continues the post-May 1 trend of foreign investors taking over some of the best known Latvian companies.
Commenting the deal, the Danish Brewery Group's international director, Connie Astrup Larsen, said that the strength of the Danish Brewery Group and Cido's "well-developed sales and supplies network would ensure possibilities for growth in Latvia and the two other Baltic states."
Vadims Vlasovs, executive director of Cido Partikas Grupa, which owns Cido, said that a merger with a solid international company was an important step for strengthening the Latvian company's position on the Baltic market and boosting its exports to Europe.
Announcement of the deal, however, struck a bitter chord in the government, with one minister decrying the recent acquisition trend.
"That's business Latvian-style - you set up a company and then sell it," said Agriculture Minister Martins Roze, adding it is nicer to know that local companies are owned by Latvians.
Earlier this year Latvia's Spilva, a producer of sauces, was bought by Norway's Orkla food conglomerate.
The price of the Cido deal was undisclosed, but the Biznes & Baltija daily reported that the Danes paid some 115 million Danish kroons (15.4 million euros).
A Danish Brewery Group official told the Baltic News Service that Cido had debts for 5 million lats (7.4 million euros), and total investments by the group would amount to some 15.2 million lats.
The deal must be approved by the Latvian Competition Council.
Cido Partikas Grupa posted a consolidated turnover of 18.4 million lats (28 million euros) last year and claims that it is the market leader among Latvian juices and nectars, with a 46 percent and 23 percent market share respectively.
Cido Partikas Grupa was founded in 1994 and has until now belonged to a number of private persons, of which the largest shareholder is Galina Jevsejeva, the Baltic News Service reported.
The Danish Brewery Group includes four Denmark-based breweries and two Lithuanian breweries - Tauras and Kalnapilis and in Norway it owns 25 percent of Hansa Borg Bryggerierne, which by license produces some of the group's products. The group employs some 1,500 people worldwide.
Group officials said its acquisition of Cido was an attempt at becoming the biggest beverage supplier in the Baltics.
Inguna Gulbe, director of the Latvian Agricultural Market Promotion Center, said that further acquisitions in the food industry was expected since interest in the Baltics' rapidly growing economies was being hyped up among older EU members.
She said the trend was taking place elsewhere in the world and that companies in older EU countries were interested in gaining market shares rather than additional production. She also said that the trend would continue next year as well, and that other acquisition deals were currently under discussion.