German dairy company Ehrmann has agreed to acquire FrieslandCampina's Russian subsidiary, Campina LLC, for an undisclosed sum.
The deal will strengthen Ehrmann's position in Russia and allow FrieslandCampina to focus on consumer markets elsewhere.
Both companies hold strong positions in different segments of the Russian dairy market.
President of FrieslandCampina food and beverage, Roel van Neerbos, said, "This divestiture is part of FrieslandCampina's previously announced strategy to review its position in various markets.
"Under Ehrmann's umbrella, our Russian consumer dairy business will be able to develop further and realise its full growth potential."
The deal, expected to close by the end of June 2021, is subject to the approval of the Federal Antimonopoly Service of the Russian Federation, as well as authorities in Kazakhstan, Uzbekistan and Belarus.
After the transaction is complete, Ehrmann will acquire 100% ownership of Campina LLC with its 650 employees and all assets and contractual obligations.
Ehrmann will manage the dairy production in Stupino in the Moscow region and develop the brands Fruttis and Nezhny.
Market Share Growth
Christian Ehrmann, CEO of Ehrmann SE, said, "This acquisition reflects Ehrmann's strategy of growing its market share in Russia with locally produced, strong brands."
Ehrmann SE is one of the largest dairy companies in Germany, which also operates production facilities in Russia and Brazil, as well as sales offices in Italy, Spain, the Czech Republic, Poland, Finland and China.
It employs more than 2,400 people and generated a turnover of €810 million in 2019.
The group also includes the companies J.M. Gabler Saliter and the Fleischwerke Zimmermann meat processing plant.
Ehrmann sells its products in more than 70 countries around the world.