Agrokor Finally Agree Deal With Mercator's Creditors

After the initial €240 million acquisition was announced in June 2013, Croatian retailer Agrokor has…

After the initial €240 million acquisition was announced in June 2013, Croatian retailer Agrokor has finally agreed a deal to restructure the debts of its Slovenian asset and past rival, Mercator.

Slovenian daily business publication 'Financial' reported on Friday that Agrokor had struck deals with two of Mercator's largest creditors, the Austrian institutions Erste Bank and Raiffeisen bank.

It comes just in time, as per the terms of purchase, Agrokor have until March to put in order and restructure all of Mercator's debts.

Zagreb-based Agrokor, which has stores across the Balkans, struck a deal to buy a 53.1% stake in Mercator last summer from a consortium of 12 shareholders, with each share costing €120. According to Agrokor, this represents €452 million (US$587 million) for a 100% stake. Shareholders have been looking to offload stakes in the retailer since 2008.

At the time Agrokor said that 'the partnership of Agrokor and Mercator will create one of the largest retail companies in Central and Eastern Europe, with top market positions across the Adria region. The combined company will achieve around €7 billion of annual revenues and employ over 60,000 people'.

'Through the combination of operations, both companies will benefit from increased scale and synergies, resulting in increased profitability and cash flow generation'.

Commenting on the acquisition, Ivica Todorić, Agrokor president, said, "This combination represents a compelling business opportunity to create a retail champion with the potential to increase overall competitiveness, preserve employment and to spearhead future economic growth and preserve employment not only for Slovenia and Croatia but for the wider region and gain relevance on European scale."