Kernel acquisition permitted by Ukraine antimonopoly committee

Ukraine’s leading sunflower oil producer Kernel (KER PW, KERPW) was granted permission by the Antimonopoly Committee of Ukraine to purchase an ownership stake of more than 50% in 10 companies belonging to Agro Invest Holding, the Interfax agency reported on May 3.

Registered in Ukraine, Agro Invest Holding belongs to Serbian businessman Miodrag Kostic and is involved in grain and animal farming in the Vinnytsia, Kyiv, Zhytomyr and Cherkasy regions. The company cultivates around 40,000 hectares of land producing 175 kt of grains annually, and operates two grain elevators with a total capacity of 174 kt.

Igor Zholonkivskyi: Obtaining the antimonopoly committee’s approval is standard legal procedure and it does not mean that the deal will be finalized. Recall that Kernel earlier announced plans to enhance its land bank by about 150,000 hectares, and might be in the final stages of acquiring the holding company Ukrainian Agrarian Investments, according to anonymous sources cited by Ukrainian media. 

We believe Kernel will attempt to strike any acquisition deals before the start of the FY2018 in June 2017. We expect some announcements from Kernel about the acquisition progress on May 30 – the day when the company will publish its 3QFY17 financial results.