Polish meat processor offers to acquire local meat business

Polish-meat-processor-offers-to-acquire-local-meat-business.jpg

In what could become Poland’s largest meat industry takeover in recent years, Polish meat processor Tarczynski has made an offer to acquire local troubled meat business ZM Henryk Kania.

The latter company recently filed for a restructuring procedure, and was seeking up to PLN 50m (€11.5m) in external funding to re-launch its production activities.

“The management board of Tarczynski S.A. … informs that a representative of the company has submitted an offer to purchase an organised part of the company Zakłady Mięsne Henryk Kania S.A. in restructuring to its court supervisor,” Tarczynski said in a filing to the Warsaw Stock Exchange (WSE).

Meanwhile, ZM Henryk Kania has reacted to the offer by claiming it was submitted in violation of Polish financial regulations. Tarczynski sent its bid to the company's court supervisor, while it should submit the offer to ZM Henryk Kania’s management board, the meat business said in a statement.

Earlier this year, a number of financial institutions, including banks, financial institutions, car leasing service providers and other entities, decided to cancel their deals with ZM Henryk Kania amid reports of the company’s financial woes.

Portugal’s Jeronimo Martins, owner of the Poland-based Biedronka discount store chain, had been the firm’s main retail partner in the Polish market. In addition to Biedronka, ZM Henryk Kania also sold its products through a number of other retailers, including Intermarché, Auchan, Carrefour, Makro, Kaufland, Netto, and Lidl. Outside the Polish market, the company also exported a minor share of its production to various European Union member states.

Meat industry consolidation

The value of the potential acquisition was not disclosed. However, it is likely that, should Tarczynski decided to pursue the takeover, the transaction would need to be approved by Poland’s competition watchdog UOKiK due to the size of the involved companies.

For the first quarter of 2019, Tarczynski reported revenues of some PLN 200.2m (€46m), an increase of 10.7% compared with the same period a year earlier. In the first three months of 2019, the business generated a net profit of PLN 7.2 (€1.7m), up from PLN 5.6m (€1.3m) posted for the first quarter of last year, according to data from Tarczynski’s consolidated quarterly report for the January-March 2019 period.

Tarczynski specialises in processed pork and poultry meat products. While sales in the company’s domestic market dominate Tarczynski’s revenues, the meat business also exports its output to a number of EU member states.

In 2016, Tarczynski launched its meat processing plant in Ujezdziec Maly, complementing the company’s plant in Bielsko-Biala, both located in the country’s south. The firm was established by local businessmen Elzbieta and Jacek Tarczynski. The latter currently serves as the president of Tarczynski’s management board.