Kernel acquisition of Ukrainian Agrarian Investments permitted by AMC

Ukraine’s leading sunflower oil producer, Kernel (KER PW, KERPW), was granted permission by the Antimonopoly Committee of Ukraine (AMC) to purchase an ownership stake of more than 50% in Ukrainian Agrarian Investments holding (UAI), the Interfax agency reported on May 12.  On March 31, Ukrainian media reported, citing anonymous sources, that Kernel was in the final stage of acquiring UAI.

Igor Zholonkivskyi: Obtaining the AMC’s approval is standard legal procedure and it does not mean the deal will be finalized. Nonetheless, we believe that the probability of Kernel’s acquiring UAI is higher than 50%. Kernel’s strategic plans include expanding its land bank by at least 150,000 hectares, which can cost around USD 150 mln, and can on average, result in an incremental annual EBITDA of about USD 38 mln. We expect some announcements from Kernel about the acquisition’s progress on May 30 – the day that the company will publish its 3QFY17 financial results.