Croatia’s major largest bakery chain could soon change ownership.
Podravka has sent an official non-binding takeover bid for Mlinar, the company owned by “baking king” from Osijek Mate Škojo. It has proposed a transaction through Žito, a company it owns in Slovenia, and in that way began the final stage of the expected consolidation of the bakery sector in the region, reports Jutarnji List on January 25, 2017.
The information has been confirmed by multiple well-informed sources. The offer has been allegedly agreed with Škojo in advance, and it is no secret that leaders of Podravka have been in contact with the Mlinar boss for months. However, the non-binding offer does not mean that the deal will certainly be finalized, since Podravka is not the only interested candidate. Mlinar is allegedly also being targeted by the Slovenian-Serbian group Don Don.
If Podravka is successful, it will create the strongest bakery company in the region, with a complete production process – from wheat fields to bakeries and retail. In 2015, Mlinar had about 440 million kuna in revenues and nearly 50 million kuna in net profits. Unofficial sources estimate that Podravka could pay between 400 to 500 million kuna for the takeover of Mlinar.
However, it is difficult to assess how Škojo will respond to the offer. He is reportedly willing to sell the entire business, but it is possible that Podravka rushed to send its offer due to the interest expressed by Don Don. In any case, the consolidation in the bakery industry in the region this year is inevitable and it is possible that only two strong players, Podravka and Don Don, will remain in the market.
Škojo is reportedly willing to sell Mlinar because the competition from Podravka and Žito has become very strong. The second reason is allegedly debt of the company which, due to investments, last year reportedly grew to nearly 300 million kuna.
With the possible takeover of Mlinar, Podravka would have an integrated baking industry with about 1.5 billion kuna in annual revenues, with nearly 100 million kuna in net profits, about 2,500 employees and more than 200 stores in the region. It would be the strongest bakery company and the biggest buyer of wheat in the region.
