Raisio is selling its cattle feed business to Sweden’s Lantmannen for EUR34m (US$40.7m) as the Finland-based food group accelerates its strategic realignment on the healthy foods category.
The Helsinki-listed firm said the deal will be conducted through a share transaction and is expected to be completed in September if Finnish competition authorities lend their approval. Raisio’s fish feed business will stay within the group.
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Two cattle feed manufacturing facilities in Ylivieska and Kouvola will go, along with Raisio’s associated brands of which Maituri and Melli are the best-known, while Raisioagro’s Benemilk licence will be given over to Lantmannen. Meanwhile, a total of 76 employees will be transferred to Lantmannen Agro.
Raisio said earlier in the year it was considering offloading the cattle feed operations after selling its UK confectionery business, which included brands such as Poppets and Fox’s Glacier Mints, to Ireland-based Valeo Foods in December as the company turned its focus towards healthy foods.
Chief executive Pekka Kuusniemi reiterated in a statement yesterday (4 May) acquisitions could be on the cards as part of its strategic rethink.
“The cattle feed business divestment is an important step towards Raisio’s strategy focusing on healthy foods and profitable growth,” he said. ”The proceeds from this clearly profitable deal allow organic growth and acquisitions.”
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By GlobalDataKuusniemi added that the Raisioaqua fish feed business that will be retained is an ”innovative forerunner in its sector and a solid part of Raisio that focuses on healthiness and responsibility”.
Concurrently, Raisio has also tweaked its outlook for sales. Last week, the company cut its full-year guidance to ”approximately” flat, from ”slightly” up on last year, while the EBIT outlook remained unchanged. Now, the Benecol owner said it expects net sales from continuing operations to be “approximately at the 2017 level”.
In 2017, the company booked sales from continuing operations of EUR306.8m, while comparable EBIT dropped 2% to EUR37.8m.
