Agrokor announces the signing of an agreement for the acquisition of a majority shareholding in Mercator

Agrokor d.d. (“Agrokor”) has signed a Sale and Purchase Agreement (“Agreement”) with a consortium of twelve selling shareholders for 53.1% of the share capital of Poslovni sistem Mercator, d.d. (“Mercator”). Agrokor’s cash offer of €120 per share values this stake at €240 million or €452 million for 100% stake.

Agrokor announces the signing of an agreement for the acquisition of a majority shareholding in Mercator

The partnership of Agrokor and Mercator will create one of the largest retail companies in Central and Eastern Europe with top market positions across the Adria region. The combined company will achieve around €7 billion of annual revenues and employ over 60,000 people. Through the combination of operations, both companies will benefit from increased scale and synergies, resulting in an improvement in profitability and cash flow generation.

Both the consortium of shareholders and Agrokor acknowledge the importance of the transaction to a wide range of Mercator’s stakeholders including customers, employees, suppliers, and creditors. As such, as part of the transaction, Agrokor has agreed to certain undertakings, demonstrating Agrokor’s commitment to Mercator’s continued success and its support to its stakeholders.

At the signing of the Agreement Ivica Todorić, President of the Agrokor Group, said: “We are delighted to have been selected as Mercator’s strategic partner and are committed to delivering on the trust that has been placed in us to secure the long term future of the company. I would like to take this opportunity to thank the business community and the Consortium for the confidence and the chance given to us to combine two successful businesses. This combination represents a compelling business opportunity to create a retail champion with the potential to increase overall competitiveness, preserve employment and to spearhead future economic growth and preserve employment not only for Slovenia and Croatia but for the wider region and gain relevance on European scale.

I would also like to congratulate the employees of Agrokor who with their experience, motivation, ambition and vision created foundations for this landmark transaction to materialize. The combined company will offer our customers greater value through an expanded assortment of goods, the best prices and a higher quality of service. In addition, the strong strategic fit of our operations will allow the joint company to realize significant value and benefits for all stakeholders resulting in a stronger financial position and the potential for further regional expansion.”

Gilles Mettetal, member of the Supervisory Board of Agrokor representing EBRD stated “We have supported Agrokor since the late 1990s, since when they have proven themselves to be a reliable partner for the EBRD due to their values and strong management. We are excited about the potential that this combination brings, especially considering Agrokor’s track record in executing successful transactions in the region. We believe that the transaction will create additional value, both through synergies and additional investments. I am sure that the EBRD will continue to consider favorably supporting the future development of this new venture”

Completion of the transaction is subject to regulatory approvals, the successful refinancing of Mercator’s outstanding debt and other customary conditions. The transaction is expected to be completed around the end of 2013. Following the closing of the transaction, Agrokor will be obliged to publish a mandatory tender offer for the remaining shares of Mercator.