This spring we saw a solid advancement of the privatization process in Slovenia. Some of the major companies were sold to foreign investors. Laško Brewery was bought by Heineken, while another two food and beverages companies, Radenska and Žito, also got new owners. Merrill Lynch has meanwhile bought some bad claims of major Slovenian companies which might be converted into ownership shares.
Slovenian PM Miro Cerar
This spring we saw solid advancement of the privatization process in Slovenia. Some of the major companies were sold to the foreign investors. Interestingly enough, most notable were the sales of shares in the food and beverages sector. In April a 51-percent stake of the leading Slovenian beer brewery Laško was sold to Dutch Heineken. One of the world’s leading beer producers offered 25.56 euros per share. The total transaction price for Laško Brewery was set at 223.6 million euros.
Together with Laško Brewery Heineken also got Ljubljana based brewery Union, the second largest brand on the Slovenian beer market. Union was taken over by Laško a decade ago when Laško outbid the other prospective buyer, global beer giant Anheuser Busch. Other parts of the Laško group – like its newspaper division – are sold separately.
Last December Laško already sold 75 percent of Radenska soft drink producer to Czech group Kofola. The Czech bought Radenska in consortium with their main competitor in the bidding process, Slovenian company P&P group. The consortium will focus on reestablishing Radenska as one of the leading mineral water brands in Central Europe.
The largest food producer still in Slovenian hands was Žito bakery. In spring Žito was taken over by Croatian group Podravka. Mercator, the largest Slovenian retailer, also ended up in Croatian hands. It was taken over by Konsum group owned by Croatian tycoon Ivica Todorić. Many saw the sale of the retail chain, present throughout the Balkans and with some 3 billion euros of revenues, to the heavily indebted Konsum as controversial.
In April The Bank Asset Management Company (BAMC) published a bid to sell the majority equity stake in the largest Slovenian cooking oil maker Tovarna Olja Gea. The company controls some 50 percent of the home market and as well as having a presence neighboring countries.
In March BAMC somewhat surprised the public by selling 123 million Euros in claims towards four companies to Bank of America Merrill Lynch. These companies include financial holding ACH, stocking manufacturer Polzela, national air carrier Adria Airways and Elan, one of the leading manufacturers of sport equipment in the region. This was an important move, as Merrill Lynch might convert the debt to equity and thus enter into the ownership structure of the companies.
Not every family jewel is to be sold, though. In May the government proposed to parliament a list of 23 companies with strategic importance to the country: in those companies the state will retain the controlling share. These companies are mostly operating the nation’s key infrastructural objects like motorways (DARS), railways (Slovenske železnice), the port of Koper (Luka Koper) or power plants and the electrical grid. Another 21 companies are described as “important for the nation”. Overall the state will keep its share in at least 44 companies. The move was made to pacify the militant trade unions, left oriented parties and media, which continue to strongly oppose any privatization. In general, the government remains determined to carry out its privatization plans. As observed many times by organizations like European Commission, OECD or IMF, the privatization is essential to the reform process in Slovenia.
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