"Sojaprotein", "Galenika Fitofarmacija", "Metalac" and "Energoprojekt" – potential targets for takeovers

According to the latest Erste Group’s report on capital market in Central and East Europe (CEE), the targets of acquisitions among Serbian companies could be "Sojaprotein", "Galenika Fitofarmacija", "Metalac" and "Energoprojekt".

Erste Group anticipates deceleration of economic growth in 2009 in the entire region, as well as maintenance of difference in amount of rates between regional and western markets.

The analysts from Erste Group find “Sojaprotein”, the only soybean-processing company in the region, very interesting for takeover.

That company has the base of raw materials, the developed control of entrance of genetically modified products and almost monopolistic position in Serbian market.

According to the estimates of Erste Group, the ownership structure of the Bečej-based company is also good for potential buyers and the current market capitalization of over 50m EUR is much smaller than the estimated turnover of 220m EUR in 2008.

The group of potentially desirable companies also includes "Galenika Fitofarmacija", the manufacturer of chemical products for agriculture that established firm cooperation and distribution connections with several largest players in the sector, such as companies "Dow Chemicals" and FMC.

According to the estimates from Erste Group, Fitofarmacija needs significant funds to register and license products for export to EU and these funds, in the present financial environment, could be provided through strategic partnership or sale.

Another company that may be the subject of acquisition is "Metalac", one of the best European manufacturers of dishes that export its products to EU, Russia and former countries of Yugoslavia.

The estimated turnover of "Metalac" in 2008 was about 65m EUR, while the value of current market capitalization is 18m EUR.

However, the analysts are warning that the potential buyer could meet difficulties because the management and the employees own 40% of stocks of the Gornji Milanovac-based company.

Erste Group also put “Energoprojekt”, the largest building company in Serbia whose 30% are owned by the state, on the list of potentially desirable subjects of acquisitions in Serbia. That holding realizes almost 50% of all incomes from abroad.

The expected annual income of "Energoprojekt" in 2008 is 220m EUR. Its current value on the Stock Exchange is 58m EUR.

People in Erste Group estimate that the buyer of the state-owned share of 30% is going to have easy access to the control package in "Energoprojekt" because 50% of stocks are in the possession of numerous institutional investors.

By the way, Erste Group is one of the leaders in the sector of financial services in CEE and it has 16.4m clients in eight countries, including Serbia.

Erste Bank a.d. Novi Sad

Sojaprotein d.o.o. Bečej

GALENIKA - FITOFARMACIJA a.d. Zemun

Metalac a.d. Gornji Milanovac

Energoprojekt Holding a.d. Beograd