Linas Agro Group plans changes: agricultural inputs business to be transferred to one company

AB Linas Agro Group plans to consolidate the activities of goods and services for farmers and grain sourcing in one company – AB Linas Agro. It is foreseen that AB Linas Agro will take over the activities of the Crop Division of Kauno Grudai and its obligations to partners and customers from the second half of 2022.

A part of the team and assets of AB Kauno Grudai will be transferred to AB Linas Agro in exchange for shares in AB Linas Agro to Kauno Grudai. Most of these changes are expected to be implemented by July when both companies start the new financial year.

In mid-July last year, AB Linas Agro Group acquired controlling stakes in AB Kauno Grudai, AB Kaišiadoriu Paukštynas, AB Vilniaus Paukštynas, and related companies. After several months of performance analysis, planning of transformations has been started to strengthen each activity.

‘When we acquired AB Kauno Grudai, we foresaw that there would be necessary transformations in the future because both teams compete in supplying goods to farmers. We don't benefit from intra-company competition. For customers, the merging of the product baskets promised a better product offer; thus, in the autumn, the two companies started to cooperate in forming a consolidated assortment. We are continuing this path: separating the goods for farmers business from Kauno Grudai and transferring it with all assets and teams to AB Linas Agro. We hope to keep all employees, as both merging teams are strong. The future combined team of goods and services for farmers should secure leadership in the agricultural business in the coming financial year. Instead, we wish to turn Kauno Grudai into a flagship in food production, developing new nourishing food products,’ says Mažvydas Šileika, CFO of Linas Agro Group.

After transferring the business of goods for farmers from AB Kauno Grudai to AB Linas Agro, Kauno Grudai will become a shareholder of AB Linas Agro. Subsequently, it is planned to sell the assets of UAB Kauno Grudai ir Partneriai, which owns grain elevators, to AB Linas Agro after valuation.

‘The transfer transaction is not a simple act. Kauno Grudai is a public company, so we cannot simply take out one activity and transfer it to another company, we must consider the interests of its minority shareholders. We plan to carry out business valuations of several companies – AB Linas Agro, the crop-related business of AB Kauno Grudai, and UAB Kauno Grudai ir Partneriai, which owns grain elevators. With the valuations, which we entrust to the renowned audit company, we will be able to plan further actions, that will have to be firstly approved by the Board of AB Kauno Grudai,’ says M. Šileika.

To optimize its corporate structure, AB Linas Agro Group is also carrying out more mergers of subsidiaries: it is currently merging four companies that operate grain elevators, and two land-owning companies. More transformations are foreseen in the future to simplify the structure of Linas Agro Group.

About AB Linas Agro Group

AB Linas Agro Group is the Baltics' largest agricultural and food production group, comprising 75 subsidiaries and three associates operating in 8 countries and employing 5,398 people. The group operates along the entire food production chain ‘from field to table’: company’s subsidiaries produce, process, and market agricultural and food products, also provide goods and services to farmers.

The group's financial year begins on 1 July. The consolidated revenue of AB Linas Agro Group for the financial year 2020/2021 amounted to EUR 942 million, and net profit was EUR 14.2 million.

In mid-July last year, AB Linas Agro Group acquired controlling stakes in AB Kauno Grudai, AB Kaišiadoriu Paukštynas, AB Vilniaus Paukštynas, and related companies. Following the acquisition, the consolidated revenue of AB Linas Agro Group for the three months of the financial year 2021/2022 grew by 84% to EUR 440 million, net profit increased by 199% to EUR 12 million. In January of this year, AB Linas Agro Group acquired UAB Agro Logistic Service, a feed materials and feed additives trading company.

Additional information will be provided by:

Mažvydas Šileika, CFO of AB Linas Agro Group
Mob. +370 619 19 403
E-mail m.sileika@linasagro.lt