Meat producer HKScan has signed an agreement to sell its Baltic subsidiaries to Estonia-based food company, Maag Grupp, for €90 million.

The deal will include the purchase of HKScan Estonia, HKScan Latvia and HKScan Lietuva.

According to the company, “the debt-free purchase price is €90 million, of which €20 million is conditional on the combined performance of the separately defined meat business subject to the transaction and Maag Grupp’s Baltic meat business in the following years”. In addition, €55 million of the fixed purchase price will be paid at the closing of the transaction, with the remainder over a three-year period.

“The sale of the Baltic business will improve HKScan’s profitability and strengthen its balance sheet,” said HKScan’s interim CEO, Juha Ruohola. “In addition, the divestment will enhance our ability to improve our operational efficiency and to execute our long-term strategy of growing into a versatile food company.”

HKScan’s Baltic production units are located in Rakvere, Tabasalu and Viiratsi in Estonia, and Jelgava in Latvia. The company’s consumer brands in the Baltics are Rakvere, Tallegg, Rigas Miesnieks, Jelgava and Klaipedos Maistas. 

“The acquisition of HKScan’s Baltic business will help Maag strengthen its position and achieve the full synergies in the Baltic market,” added Roland Lepp, chairman of the supervisory board of Maag Grupp. “This will also provide us all [with] better food security in turbulent times.”

The transaction, which is expected to close in the second half of 2023, is subject to regulatory approvals in Estonia and Latvia.