Contract until end of month, price of up to 300m EUR - "Pepsi" to buy "Knjaz" ?

Source: Blic Thursday, 01.01.1970. 15:01
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The US multinational company "Pepsi“ will become the new owner of Serbian water factory "Knjaz Miloš“. As Biljana Marković, the personal assistant of the Executive Manager of "Pepsi A&P“ Ltd., Alkis Hrizostomu, explained for "Novac", formal buyer will be "Pepsiko amerikas“, while the contract will be signed prior to the end of the month.

People in the English investment fund "Danube Food Group“, which is the owner of "Knjaz Miloš“, say, however, that the negotiations with "Pepsi“ are underway and that the outcome will depend on whether the sides agree on the price. "The fact that people in ‘Pepsi’ claim that they are going to buy ‘Knjaz Miloš’ means that they know what to do in order to make that happen“, said Rade Pribićević, the Manager for Corporate and Regulatory Affairs in "Danube Food Group".

People in "Pepsiju“ were unable to specify the date when the factory in Aranđelovac was going to get the new owner, but they confirmed that Serbian and American sides would conclude the transaction in two or three weeks. "We can not give any details concerning the price because we are not direct participants in the negotiations, but only a branch office of company ‘Pepsi International’ in Serbia - ‘Pepsiko amerikas’“, our collocutor explained.

As it is usual for such situations, the price at which "Knjaz Miloš“ could be sold depends on several factors: financial indices, that is, current operations of the company, its (profit) potentials and possible incomes in the future, as well as on regional experiences in case of similar transactions.

(Rade Pribićević)

According to the opinion of the expert who wanted to stay anonymous, the funds like "Salford“ count on annual profit in amount of 25-30% of their investment in the company. Having in mind the information that "Salford" has invested about 160m EUR (90m EUR in purchase and 70m EUR in investments) in "Knjaz" since 2005, when it bought the factory in Aranđelovac, that means that it could expect to get between 45 and 50m EUR per year, that is, total of 140-150m EUR. Therefore, in that case, "Knjaz Miloš“ could reach the price of about 300m EUR (or even more). The price, however, can be (much) lower, depending on the aforementioned circumstances.

According to the data provided by the Belgrade Stock Exchange, current market value of "Knjaz Miloš“ is 7.5 billion RSD, or nearly 100m EUR.

The factory in Aranđelovac registered incomes in amount of 7.2 billion RSD last year, which is about 1 billion RSD more than in 2006. Of total of 651m liters of bottled water sold in our market and abroad last year, Aranđelovac-based factory sold about 30%.

Company "BB Minaqua“ in Novi Sad participated in last year's sales with 21%, "Voda Vrnjci“ from Vrnjačka Banja with 12%, while "Vlasinska rosa“ and "Heba“ participated with 8% and 7%, respectively.


As "Novac“ finds out, in addition to "Knjaz Miloš“, "Salford“ will sell other companies in Serbia - "Bambi“, "Subotica Dairy“ and "Imlek“ - within next year and half. "Imlek" now encompasses "Zaječar Dairy“, "Novi Sad Dairy" and "Zemun Dairy“.

The experts claim that such business policy is natural when having in mind that "Salford“ is an investment fund. Its principle is to invest in some company, increase its value and sell it.

Largest water manufacturers in Serbia
company share in sales (in %) owner
Knjaz Miloš 30 "Salford“
BB Minakva 21 Branislav Bogićević
Voda Vrnjci 12 Zvonko Gobeljić, company "Ekstra pet“
Vlasinska Rosa 8 "Coca-Cola“
Heba 7 on tender (interested bidders
"Nektar“ and "Roming elektronik“)

note: the text was taken from the special annex NOVAC in newspaper BLIC of September 20, 2008

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