Agrone Group completes acquisition of Latvia’s largest dairy processor, Rīgas piena kombināts and Valmieras piens
Estonia’s largest agricultural group, Agrone, has completed its acquisition of Latvia’s largest dairy processing group, AS Rīgas piena kombināts and AS Valmieras piens.
As part of the transaction, Agrone Group, through its parent company, acquired 100% of the shares in SIA Food Union Management from Food Union Luxembourg Holdings II S.à r.l. Food Union Management holds majority stakes in both Latvian dairy companies. The transaction, financed by SEB, was completed following the required approvals from the Estonian and Latvian competition authorities.
Raul Jeets, Chairman of the Management Board of Agrone, described the acquisition as a historic deal for the dairy industries of Estonia and Latvia. “With nearly a century of history, Rīgas piena kombināts has a strong market position and some of the best-known and most-loved dairy brands in the Baltics, including Kārums and Lakto. By combining Agrone’s experience in raw milk production with Rīgas piena kombināts’ and Valmieras piens’ expertise in dairy processing, product development and sales, we have a strong foundation for expanding the group’s operations, improving efficiency and strengthening competitiveness,” he said.
According to Jeets, Agrone has been working for years to expand its operations from raw milk production into dairy processing. “We are entrepreneurs with extensive experience in milk production and the ambition to build something much bigger. The acquisition of the largest dairy processing group in Latvia is an important strategic step for us, creating new opportunities to grow our business in the Baltics and expand our exports beyond the region,” he said.
Artūrs Čirjevskis, Chairman of the Management Board of AS Rīgas piena kombināts, said the company remains committed to providing customers and consumers across the Baltics and beyond with high-quality, delicious dairy products they can enjoy every day. “We are delighted that the transaction is complete and that we are now part of a strong Baltic dairy group with expertise across the entire dairy value chain, something we have aspired to for many years. There is real strength in bringing together Baltic businesses that not only understand the region’s people, their tastes and traditions, but also have the ambition and expertise to create exciting products that stand out on the world stage. This milestone gives our team renewed energy to build our brands and develop innovative products as evolving consumer preferences create new opportunities across the global dairy market. We look forward to exploring these opportunities as we prepare to celebrate the centenary of Rīgas piena kombināts in 2028,” he added.
Joosep Kadak, Head of Corporate Banking at SEB, which financed the transaction, said Agrone is a good example of how an agricultural business built with Estonian capital is taking the next step towards becoming a fully integrated Baltic company. “This transaction reflects broader trends in the region’s food industry. The local food industry is growing stronger, with an increasing focus on higher-value production, which supports food security and more ambitious export activities. Rīgas piena kombināts and Valmieras piens already export around a third of their production to more than 30 countries. The dairy industry's growing focus on creating higher-value products is a very positive development for Estonia and the wider region, both economically and from a broader security perspective,” said Kadak.
By agreement of the parties, the purchase price will not be disclosed. Eversheds Sutherland and PwC advised on the acquisition.
The change in ownership is not expected to bring immediate changes to the day-to-day operations of Rīgas piena kombināts or Valmieras piens, or to their relationships with employees, customers, raw milk suppliers and other partners. Production and deliveries will continue as usual. As a next step, the management teams of Agrone and the Latvian companies will work together to develop a joint strategy for their future development.