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EBRD supports buyout of leading food and beverages group in Serbia

By Viktorija Melohina

Major regional private equity investor to promote competiveness and higher corporate governance standards in the Western Balkans
The Serbian agribusiness sector is entering a new stage, increasing its attractiveness to both financial and strategic investors, with the takeover of the Danube Foods Group (DFG) by Mid Europa Partners (MEP), a leading private equity fund in central and south-eastern Europe. Following the most recent open-sale process in 2014, MEP has secured the winning bid with the support of its equity co-investors, the EBRD and leading commercial banks.
The Danube Foods Group comprises household brands in Serbia, such as the leading dairy producer Imlek, the confectionery firm Bambi and the beverage producer Knjaz Milos, all widely known and popular brands.
The EBRD is supporting the acquisition with a €60 million subordinated loan and a €20 million equity investment to boost competitiveness and standards in the local agribusiness sector by attracting new investment.
As a shareholder, the EBRD will focus on further improvements with regard to best practices in corporate governance, the environment, and health and safety standards. This, in turn, will support Serbia’s implementation of EU standards in food safety and quality.
“Mid Europa has been a long-term partner of the Bank and it has some of the most prominent companies in the region in its portfolio. We are happy to support them in the region and the sector. DFG’s companies in Serbia are expected to be a platform for Mid Europa to generate further growth as well as promote increased efficiency and standards through consolidation. To this end, The EBRD continues to support regional acquisitions in the sector,” said EBRD Head of Agribusiness for central and south-eastern Europe, Miljan Zdrale.
“The transaction is an opportunity for the EBRD to reconfirm its readiness to support investments in the region, which is even more important in a challenging economic climate. By becoming a shareholder we will take part in shaping the transformation of some of the leading Serbian enterprises, which is an exciting task that we will approach with enthusiasm and determination,” said EBRD Director for Serbia, Matteo Patrone.
The EBRD has a successful track record in supporting cross-border acquisitions in the Western Balkans and supporting diversification of the investor base by attracting new private strategic investors to the region.
“This is a landmark transaction for us. We are pleased to join forces with a strong partner like the EBRD. This transaction builds on the excellent co-operation we have enjoyed with the EBRD in the past, and with strong corporate governance being one of the key pillars underpinning our investment strategy, we could not have partnered with a better organisation to that end,” said MEP Director leading this transaction, Andrej Babache.
Since the start of its operations in Serbia, the EBRD has invested more than €3.8 billion in 187 projects across the country. The Bank invests in the financial sector, industry, commerce, agribusiness, energy and infrastructure.
In the agribusiness sector the EBRD has invested almost €9 billion in 534 projects across its countries of operation.
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