MHP considers acquisition of French poultry producer, media report

Ukraine’s leading poultry producer MHP (MHPC LI,
MHPSA) is in talks to acquire French poultry producer Doux, the Reuters news
agency reported on March 12. MHP has already submitted a takeover proposal to
French authorities. Doux is France’s biggest poultry exporter and a part of the
French agricultural cooperative Terrena. With turnover of EUR 517 mln in 2015,
the company has been loss-making over the last two years, according to Reuters.
MHP has not commented on this issue.

Andriy Perederey: As we
reported earlier, MHP has been considering acquiring poultry plants in Western Europe, particularly in France.
It will help the company to boost exports to EU coutnries from its
Ukraine-based capacities. Also, a possible acquisition of Doux will help MHP to
boost its presence in MENA countries. Such actions are also in line with MHP’s
strategy to increase poultry export volumes.

The key questions now are whether the Doux
acquisition can be indeed value-creative for MHP, and whether the Ukrainian
holding will be able to turn around the French firm. We remain bullish on MHP
stock, while at the same time cautious that the Doux deal could bring as many
risks as growth opportunities.