The Czech Republic’s biggest food company has just been eaten up by a Norwegian based rival. The deal still has to be approved by competition offices but this does not look like a major hurdle.
After its shopping trip in 2013, when it picked up the Czech soups and ingredients company Vitana, Norwegian based foods giant Orkla has been busy again in the Czech Republic. This time round, it’s the Czech based group Hamé which is the 4.7 billion crown target with a deal for the acquisition of the large local group already inked. The deal still needs to be approved by the relevant competition authorities.
On the face of it, the competition authorities should not find too much for concern. More than two-thirds of Orkla’s 30 billion Norwegian kroner a year turnover is in the Nordic and Baltic States. The Norwegian group describes Hamé’s core Czech and Slovak business – prepared meals, ketchup, tinned vegetables, jams, and baby food - as a ‘good fit,’ meaning that there are not too many overlaps with its current operations.
Around 91 percent of the products bearing the Hamé brand were produced in its own factories with around 9 percent imported and then resold.
Orkla’s annual turnover in Czech crowns stands at around 85 billion, around 15 times the size of its Czech acquisition target which in 2014 had sales of 5.5 billion crowns. Hamé’s profit in 2014 came in at 234 million crowns.
Hamé has seven factories in the Czech Republic and three abroad, in Slovakia, Romania, and Russia. The Czech company’s history goes back to the 1920’s. Around half of the company’s turnover is based on the home, Czech, market.
In 2014, Russia was the most significant expanding foreign market, with a 16 percent sales rise, followed by Romania (15 percent), Slovakia (12), and Hungary (11 percent). Israel, Poland, and Belgium have been strongly growing export markets in recent years but the company has also had to deal with the collapse of sales in Ukraine, traditionally a market where it has had solid sales and a strong presence. Last year Ukraine accounted for just 2 percent of exports.
Hamé has itself been on the acquisition trail in recent years. In 2013 it took over the distribution of the Norwegian fish label King Oscar. In 2014, it bought out the Romanian food distribution brand, La Grande Famiglia. Later in the same year, Hamé bough out Slovakia’s biggest producer of ketchup, sauces and mayonnaise, Doma, which is based in Prešov.