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Slovenia Business Week no. 04/2005: Istrabenz's Acquisition of Kolinska to Speed Up Merger with Droga

By acquiring the food company Kolinska, Istrabenz has strengthened its presence on the Slovenian food industry market

By acquiring the food company Kolinska, Istrabenz has strengthened its presence on the Slovenian food industry market, the CEO of the tourism and energy company Igor Bavcar told the press on Monday, 17 January. He said the key takeover motive was to speed up the merger with Droga, another Slovenian food company.

Istrabenz, which now holds a 93.22% stake in Kolinska, plans to expand in the food industry on foreign markets, Bavcar said.

The ownership interest in Kolinska is long-term, he told the press, saying the key takeover motive was to speed up the merger with Droga, another Slovenian food company. Istrabenz will control over 45% of the merged company, according to Bavcar's assessments.

The purchase of Kolinska is only the first step, which does not guarantee successful development, said Bavcar, who labelled the bid successful. Istrabenz will continue to make efforts for a successful merger of Kolinska and Droga, which is expected to bring the two companies a number of synergies and a higher value added.

Moreover, with their portfolios the companies could also become the market leader in Central and Eastern Europe, which has not seen any major consolidation of food companies.

Kolinska CEO Iztok Bricl told the press he was pleased to see most shareholders accept Istrabenz's offer of SIT 6,500 (EUR 27.11) a share. "This way Kolinska got a motivated, active owner, which has the knowhow and a clear vision how to manage the investment in future," he said.

Bricl said the merger agreement between Droga and Kolinska would be signed by the end of January. An analysis on synergy effects of the mergers is to be released soon, according to him.

The shareholders are expected to vote on the merger at general meetings of both companies expected to be convened by the end of March 2005. If the merger is endorsed, the new company should be quoted on the stock market by summer.

Bavcar refuted speculations that Istrabenz might sell the new company. He said Istrabenz had strategic goals in the company.

The Istrabenz CEO believes that the merger process of Kolinska and Droga also gives good prospects to people employed in the food industry. Bricl added that there would be no job cuts because of the merger.

Source: Slovene Press Agency STA

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