East Grain attracts investment from Czech Agrofert Group. This gives Agrofert Group a 65% majority stake in the Cluj-based company. The transaction is carried out primarily through a capital increase and represents the most important foreign investment in the Romanian agribusiness in the last year.
East Grain's main activity is the trade of cereals and oilseeds, but it also provides a number of adjacent services such as logistics, storage, processing and integration services. East Grain has already established itself as a regional player with a presence in Romania, Hungary and Serbia.
Agrofert's investment comes against the backdrop of EastGrain's dynamic growth, which has averaged a CAGR of 22.5% over the last 5years. The investment will enable East Grain to support its vision of expansion and diversification. For Agrofert the majority stake in East Grain means a well-founded launch pad into the Romanian agricommodities market to complement its existing fertilizer distribution network in Romania. Agrofert is the largest group of companies active in the Central European agriculture and food industry, but it is also a major fertilizer producer, which already indicates the direction in which East Grain will diversify its activities. Agrofert has so far a strong presence in agribusiness in the Czech Republic, Germany, Poland, Slovakia, Hungary and Croatia and with this acquisition it is considerably strengthening its presence in Romania.
"We are looking forward to putting our thirty years of experience to good use for the East Grain Group. Our investment will enable the group to exploit new opportunities, increase its capacities and expand its market presence." said Libor Němeček (Director M&A and CorporateFinance of Agrofert).
How important this investment is for Agrofert is also signaled by the fact that the new East Grain board will include Petr Cingr (Vice Chairman of Agrofert's Board), Libor Němeček (member of Agrofert's Board)and Andreas Klamminger (Managing Director of Fert-Tradero srl).
"In Agrofert we have found an extremely dedicated and professional partner” said Tamás Vincze CEO of East Grain who added: “we will take advantage of countless new tools that will support our long-term growth. Agrofert is the partner with whom we will be able to considerably increase the added value created by the East Group in the regional market. I believe this transaction is unique in the Romanian agribusiness: it is not an exit but a long-term partnership between an established Romanian company and a major European player."
The process will be completed in about four months, the next step being the opinions of the Directorate-General for Competition with in the European Commission and of other relevant regulatory authorities.
