Podravka is selling the confectionery business held by the Croatian agri-food group’s subsidiary in Slovenia.
Žito is offloading the assets to UPI Star based in Sarajevo for €8.6m ($10.1m). The transaction includes the brands Šumi, Gorenjka, Herba, Mistica and Bali, along with two factories in Krško and Lesce, both in Slovenia.
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All employees will also transfer to the new owner, Podravka said in a statement, without providing numbers.
Žito, based in Ljubljana, is disposing of the confectionery assets to focus on its core business in bakery.
A new company will be set up by UPI Star to house the confectionery business – UPI Star SEE Ljubljana. Meanwhile, Žito will spin off the confectionery operations prior to the deal being concluded into a new legally registered company, Šumi Gorenjka.
Post the transaction, Podravka will continue as a distributor of the confectionery brands to be disposed of by Žito.
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By GlobalData“This decision is part of our strategic orientation to focus Žito Ltd. Ljubljana on bakery as its core activity, while also ensuring that the confectionery business is preserved and further developed,” Martina Dalić, the president of Podravka, said in the statement.
“We are pleased to have found a partner who will continue to invest in and develop Šumi and Gorenjka, thereby preserving these valuable brands.”
UPI Star is owned by the family of local entrepreneur Rusmir Hrvić, who is also the co-owner and CEO of AS Holding based in Bosnia and Herzegovina, according to Podravka.
Set up in 2016, AS Holding is a diversified food and beverages company producing bakery products, confectionery, soups and spices, coffee and soft drinks.
Podravka took over Žito in 2016 after increasing its existing share holding to full ownership.
It also expanded its own portfolio last year with the acquisition of the food and drinks assets, and associated companies, of local agri-food business Fortenova Group.
In the transaction valued at €333m, Podravka bought six of Fortenova’s subsidiaries, including fruit and vegetables processor Pik-Vinkovci and grains wholesaler Felix. Belje, a producer of wines, dairy products, cured meats and tomatoes, also featured in the deal.
