HKScan to divest its Estonian egg business
HKScan, a leading Nordic meat company, has signed an agreement to sell its Estonia’s egg business, OÜ Koks Munatootmine, to Danish DAVA Foods Holding.
The deal comprises shares as well as property and facilities and will result in a minor non-cash write-off. The divestment is subject to the approval of the competition authorities. Employees of the egg business will continue to work for OÜ Koks Munatootmine which has annual net sales of €6.7 million.
A further agreement was signed between HKScan Finland Oy and Danish DanHatch AS involving the sale of HKScan Finland's hatchery business and related property to DanHatch Finland Oy, which will be a joint venture between the parties.
HKScan employees working at hatcheries in Mynämäki and Kokemäki will transfer to DanHatch Finland Oy. After the closing of the deal, HKScan Finland Oy will have a minority share of 20% in the company, with DanHatch owning the remaining 80% of shares. The deal will result in a minor capital gain. HKScan will buy one-day old chicks for its Finnish and Estonian poultry operations from DanHatch Finland Oy, which is dedicated to the long-term development of hatchery operations in Finland. This deal will close during the early part of next year.
"DanHatch has a solid track record in the hatchery business in Northern Europe and we are pleased to have a business partner that is highly dedicated to the business. This will benefit our poultry value chain and our producers. Further development and investments are required in order to meet the growing market demand for poultry products," says Hannu Kottonen, president and CEO of HKScan. "As announced in October 2014, the poultry business is a strategic development area for HKScan, and we plan to invest in a new production facility in Finland. Ensuring high-quality and cost-efficient hatchery operations is therefore very important for us."
Both transactions will free up capital. They will involve approximately 60 employees in total.
"These deals are further steps in our efforts to rationalise our operations, focus on our core business, improve our productivity and further simplify and clarify the Group structure. The changes allow us to further strengthen our position as the leading Nordic meat company," says Kottonen.
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