Ragutis and the third largest Finnish brewery, Olvi signed an agreement, according to which Olvi will acquire a 49.9 percent stake in the fifth-largest Lithu-anian brewery.
Olvi plans to buy the $6 million share package from the Czech brewery Plzensky Prazdroj, which currently controls 51 percent of shares in Ragutis. The shares will be signed over before August 30.
Most market experts believe that Olvi will be the strategic investor Ragutis needs.
"Olvi will be more devoted to Ragutis - the Baltic markets are closer to home for them than for the Czechs," Aivaras Abromavicius from the financial brokerage house Hansabank Markets reported to BNS. According to him, the Czech brewery, owned by Japan's Nomura Corporation, is more concerned with global expansion than with Eastern Europe.
Vice-President of the Lithuanian Beer Makers' Association Aurius Vidzys agrees. "Nomura is giving all its attention right now to Plzensky Prazdroj, reconstructing it and preparing it for sale to a large investor," Vidzys said. "Ragutis has been forgotten and nobody has paid any attention to it. That apparently explains the loss of market share and the smaller profits."
Ragutis had a 7.5 percent share of the beer market in July, down from 10 percent a year ago. In seven months this year the company sold 8.56 million liters of beer, or 16.5 percent less than over the same period last year, making a 1.9 million litas ($475,000) net profit in the first half. Last year's interim result was 3.24 million litas.
In Abromavicius' opinion, the arrival of a serious strategic investor will help Ragu-tis to reclaim its lost position.
"With aggressive marketing and improvement of beer quality, Olvi and Ragutis will expand their market. That will not happen earlier than the next beer season [spring-summer]," the Hansabank broker maintained.
Vilnius Taurus, fourth in the Lithuanian beer market, is also drawing interest from Scandinavia - the Danish brewer Faxe Bryg Holding, which belongs to the Danish beer consortium Bryggerigruppen, is looking to invest in Lithuania.
Two auditing firms have performed financial audits of the company this year, KPMG Lithuania as well as Ernst & Young. The auditing was ordered by the American company New Century Holding, which has a controlling stake in Taurus.
"When investors show such consistent and prolonged interest, we and the shareholders must be able to present a strong picture backed up by financial data," said Gintaras Sindaravicius, the general director of the Status company which is marketing Taurus.
He cautioned, however, that "interest doesn't necessarily mean a deal, and real investors are something else entirely."
Sindaravicius wasn't prepared to forecast how much might be paid for the 70.65 percent of shares held by New Century Holding. A year ago they tried to sell that amount for 18 million litas.
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