Swedish Ag Co-op Lantmännen Acquires Raisio Cattle Feed Business for US$40M

May 11, 2018

Finland-based food manufacturer Raisio has divested its cattle feed business to Swedish ag co-op Lantmännen Agro Oy in a deal valued at 34 million Euro (US$40 million). The decision to sell aligns with Raisio’s strategic pivot toward a concentration on healthy, sustainably produced foods.

“The cattle feed business divestment is an important step towards Raisio’s strategy focusing on healthy foods and profitable growth,” said Pekka Kuusniemi, president and CEO of Raisio. “We are pleased that the new owner of the cattle feed business is a company that has a significant position in the Nordic countries and the desire to further develop the business.”

Under the terms of the transaction, Lantmännen will acquire two production plants in Ylivieska and Kouvola, Finland, as well as a portfolio of brands, of which Maituri and Melli are the best-known. In 2013 Raisio launched pork and poultry feed rations containing GMO soy in addition to its non-GMO soy feed lines, giving European farmers greater choice in their feed decisions.

Lantmännen also will acquire Raisioagro’s Benemilk license and 76 employees of the Raisio cattle feed business, and will gain access to Raisio’s tech expertise in regard to the digitization of agricultural services, reports Good News Finland.  

Last year, net sales for Raisio’s cattle feed business, which accounts for 35 percent of Finland’s cattle feed market,  totalled €73.8 million (US$88 million); earnings before interest and tax (EBIT) was €1.9 million (US$2.27 million) and earnings before interest, tax, depreciation, and amortization (EBITDA) was €3.7 million (US$4.4 million). After the deal has gained approval from Finnish competition authorities and is finalized, Raisio will continue to deliver grains for feeds to Lantmännen Agro for an agreed-upon period of time.

Lantmännen’s business is structured as a co-op, owned by 25,000 Swedish farmers, and with 10,000 employees. The company has operations in more than 20 countries and has annual net sales of €4 billion (US$4.77 billion).

“The acquisition strengthens Lantmännen’s position in the grain value chain in the Baltic Sea region,” said Per Olof Nyman, group president and CEO of Lantmännen. “We already have large holdings in the bread and malting industry plus an established agriculture business through Lantmännen Agro Oy, with independent distributors throughout the country. Adding yet another business segment within our agriculture based business in Finland makes us a more complete business partner for Finnish farmers.”

Elisabeth Ringdahl, head of the agriculture sector at Lantmännen agreed, stating, “Raisio has a well-established feed business that complements our present offer to Finnish farmers via Lantmännen Agro Oy. We see synergies with our existing business, but above all, the acquisition will enable us to broaden our offer and become a leading supplier to Finnish agriculture customers.”

The deal is expected to be completed within the third quarter of this year.

-Lynda Kiernan  

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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