Swedish vegetable oils and fats producer AAK has acquired a 75% stake in Russia-based NPO Margaron, which produces margarines, spreads, and bakery and confectionery fats.
The financial details of the deal were not disclosed.
Margaron has been a toll manufacturer to AAK for more than 10 years and had recorded 2019 revenues of nearly SEK 280 million ($28.65 million).
Johan Westman – President and CEO of AAK said: “Russia and the CIS countries have a population of more than 200 million people and are a highly attractive market for AAK.
“It is also one of the world’s largest chocolate and confectionery markets with strong potential for our special nutrition, bakery and dairy segments as well. By strengthening our local footprint, we will have an opportunity to expand our product portfolio and unique customer co-development approach to the Russian market.”
Apart from entering into the Russian market, AAK will move closer to many of its global accounts, which have established themselves in the country.
The company also has the option to acquire the remaining 25% stake in Margaron, subject to the meeting of certain long-term targets.
The deal is expected to be closed in the second quarter of 2020, subject to approval from local authorities.
Jan Lenferink – AAK Europe President said: “AAK’s sales team in Russia has together with Margaron delivered strong regional growth over recent years.
“This acquisition will enhance our customer proximity, increase our business opportunities and further grow our market share in the region.”