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Cherkizovo Acquires Kingdom to Become Top Russian Poultry Firm

by 5m Editor
29 August 2007, at 9:48am

RUSSIA - Russia's Cherkizovo has acquired 100 percent of Chicken Kingdom to become the country's biggest poultry producer, the company said on Wednesday.

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"Fundamentally this acquisition gives Cherkizovo the scale, strong brands and market share to further pursue our strategy of continued strong growth in the Russian market."

Sergey Mikhailov, CEO of Cherkizovo.

The acquisition was funded mainly from IPO proceeds with some additional debt financing raised by the company. The purchase price agreed between the parties was approx $143 million. This was for the acquisition of 100% of the share capital, certain trademarks of Chicken Kingdom and to retire certain liabilities.

Commenting on the acquisition, Sergey Mikhailov, CEO of Cherkizovo, said:

"We are delighted to acquire Chicken Kingdom today, which now makes Cherkizovo Russia's clear number one poultry producer. This is a key step for the business and will, in addition to driving strong organic growth, transform our poultry division by doubling our production capacity. Today's acquisition has also enabled us to enter new and dynamic regions that present us with excellent opportunities for further growth and strengthen our offering in the central region of the European part of Russia.

"Fundamentally this acquisition gives Cherkizovo the scale, strong brands and market share to further pursue our strategy of continued strong growth in the Russian market. We will also benefit significantly from the synergies related to combined efforts in procurement of raw materials, warehousing, sales and distribution.

"We expect to continue to drive further growth for the Group through organic growth of our existing divisions, complemented by opportunities that exist, like today's acquisition, in the ongoing consolidation within our key Russian meat producing markets."

Deloitte Corporate Finance acted as Cherkizovo Group's exclusive financial advisor on this deal.

5m Editor