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Danish Agro to sell CLAAS products in Estonia, Latvia and Lithuania
On 10 February Danish Agro signed a deal with Finnish group Kesko to acquire 45% of the shareholding in its three machinery companies
The three companies, AS Konekesko Eesti, SIA Konekesko Latvija and UAB Konekesko Lietuva, sell agricultural machinery, including as exclusive dealers for the CLAAS product range in Estonia, Latvia and Lithuania. Furthermore, the deal opens up for the possibility of Danish Agro to acquire Keskos machinery activities in Finland before the end of 2020. Kesko also represent CLAAS exclusively in Finland.
The three Baltic companies have around 200 people employed with a total of 13 branches, including stocks of spare parts and service facilities. Total turnover is around 130 million EUR per year. All three companies are healthy, profitable and well-managed.
Group CEO in Danish Agro, Christian Junker sees significant potential in the deal:
"I am very satisfied with the deal with Kesko, which will mean that Danish Agro will now be represented by CLAAS machinery sales in all six countries in Scandinavia and the Baltics. We already enjoy an excellent, trustful relationship with CLAAS, and we see plenty of potential and synergies in extending that to several other countries. The Danish Agro group is the market leader within traditional agribusiness in the Baltics, with annual turnover of about 500 million EUR. The three machinery companies we have now invested in are also the market leaders within their field of business there. We gain a very strong market position as a partner to Baltic farmers," he says.
Danish Agro's deal with Kesko includes the option of acquiring the remaining 55% of the shares until the end of January 2019.
Machinery sales in Finland
The deal also gives Danish Agro the opportunity to acquire Keskos machinery activities in Finland, where they also represent CLAAS, before the end of 2020.
"The deal with Kesko provides us with the possibility until the end of 2020 to invest in their Finnish machinery activities. We have no current plans for such an investment right now, but we are glad that we now have time to consider the possibilities in a potential future investment,” Christian Junker says.
A potential future acquisition of the Finnish machinery activities and the remaining Baltic shares is depending on approval from the relevant competition authorities.
Vestjyllands Andel sells shares
Vestjyllands Andel decided last year that they did not want to be involved in CLAAS machinery sales in Scandinavia. In connection with Danish Agros new deal with Kesko in the Baltic countries a deal has been made between Vestjyllands Andel and Danish Agro. Vestjyllands Andel has decided to sell its 16.2% shareholding in DAVA Machinery Holding A/S, which handles the group's existing machinery sales in Estonia, Poland and the Czech Republic.
"I have full understanding for Vestjyllands Andel's decision to not be part of the CLAAS partnership in Scandinavia and the Baltics. I therefore regard their decision to sell their remaining machinery sale activities to us as recognition of our excellent, trusting partnership. We gain a clearer ownership structure for our machinery sales activities – especially in the Baltic States – for which I have the greatest respect," states Junker.
As a result of Vestjyllands Andel's sale, all machinery activities in the Danish Agro group can be brought under Danish Agro Machinery Holding A/S. Meanwhile, partnership on machinery sales will be intensified with German agribusiness group Agravis Raiffeissen AG. The new activities in the Baltics will be part of the existing joint venture between the two groups. Danish Agro owns 75% and Agravis 25% of machinery sales activities in Estonia, Latvia, Lithuania, Poland and the Czech Republic.