THE LACTALIS GROUP WILL ACQUIRE ALBALACT ZUZU and Fulga get a French accent

The Zuzu and Fulga brand will enter the portfolio of French group Lactalis, after the shareholders of "Albalact", the biggest company with a majority local shareholder in the milk industry, have concluded a sale agreement.

The announcement, posted on the website of the Bucharest Stock Exchange, has caused "Albalact" stock (ALBZ) to rise almost 15% to 0.3800 lei/share.

The representatives of the company have said that, from the calculation formula used to complete the deal, this would put the stock price at 0.4543 lei/share, using data from September 30, 2015. They have warned, however, that the deal depends on obtaining the necessary approvals.

The press release sent to the BSE states: "On January 27th, 2016, the management of Albalact S.A.(...) was informed by its shareholders: Raul Ciurtin, Lorena Beatrice Ciurtin, Crisware Holdings Limited, Croniar Holdings Limited and RC2 (Cyprus) Limited (Selling shareholders) about the following: Lactalis has entered an agreement with the Sellng Shareholders which together own 70.3% of the share capital of Albalact - one of the leaders of the dairy market in Romania -, with the goal of acquiring all of the shares owned by the Selling Shareholders ".

The aforementioned shareholders have committed to sell their stakes, which amount to 70.3%, in a takeover offer which will be initiated by Lactalis to acquire 100% of Albalact.

"Exclusively for exemplification and based on a net adjusted debt of 118.2 million lei on September 30, 2015, based on the calculation formula used to conclude the deal we would get a price of per share of 0.4543 lei", according to the company, which stipulates: "The exemplificative price of 0.4543 lei per share includes a premium of approximately 37% of the closing price on the Bucharest Stock Exchange on January 27th, 2016, the company states. This calculation takes into account the historical financial data of Albalact and no one can base their decision to invest or any other kind of decision concerning Albalact stock on such a calculation". For clarity, company officials further stated: "Given the previous terms in the contract between the Selling Shareholders and Lactalis and the requirement to determine the price at a subsequent date, there is no certainty that this contract will be implemented or that it will be implemented at the price stipulated in the example mentioned above".

Albalact is the biggest company with a predominantly domestic capital in the dairy industry. Raul Ciurtin and his wife currently hold approximately 41% of the shares, through two companies in Cyprus.

Albalact owns 99.01% of the shares of Rarăul Câmpulung Moldovenesc and 100% of logistics firm Albalact Logistic SRL, with over 1,000 employees across of the three entities.

Albalact sells fresh, pasteurized and UHT-processed products under the Zuzu, Fulga, Rarăul, Albalact and Poiana Florilor brands.

Albalact has seen a net profit 9.98 million lei in the first nine months of 2015, up 3,605% YOY when the net profit amounted to 269,370 lei, according to the financial results published on the website of the Bucharest Stock Exchange (BSE). The Albalact group has seen a net consolidated revenue of more than 312.8 million lei, in the first three quarters of 2015, up slightly over the similar period of 2014, according to IFRS financial reporting.

Lactalis is a world leader in the milk processing industry, and owns brands such as President and Parmalat. The group has 75,000 employees and over 200 plants, in 43 countries, with a turnover of 17 billion Euros last year.

In Romania, the group has acquired the LaDorna group in 2008, from businessman Jean Valvis, for a price somewhere 80-90 million Euros.