January 27, 2016

The French dairy group, Lactalis, has agreed to acquire Albalact, the biggest diary producer in Romania, in a deal that Romania Insider reports could potentially have a value of €65 million. In business since 1971, Albalact controls three businesses, producing milk, butter, sour cream, yogurt, and cheese, under the brand names Zuzu, Fulga, and Poiana Florilor for the Romanian market.

Lactalis has reached an agreement with Albalact’s majority shareholders for the purchase of their stakes totaling 70.3% of the company, however the transaction is subject to approval of Romania’s Competition Council and the ‘absence of material adverse change’ according to an announcement submitted by Albalact to the Bucharest Stock Exchange.

If given approval, Romania Insider reports that Lactalis will proffer a takeover bid for 100% of the company’s shares. For this deal, Albalact’s assets have been valued at €90 million, however, as of September 2015 the company was carrying an adjusted net debt of €26 million, bringing the value of the deal to €64 million.

Lactalis has had a presence in Romania’s dairy sector since 2008 when it acquired local dairy producer, La Dorna from Jean Valvis in a deal worth between €80 million and €100 million, and a spokesman for the group  told Dairy Reporter that the group is optimistic that it can “take a leading position in Romania after this move, if everything goes alright.”