Agrovaldymo Grupė acquires Žemės Vystymo Fondas

Lithuania’s largest agricultural investment company Agrovaldymo Grupė (AVG) has acquired Žemės Vystymo Fondas group of companies (ŽVF) that controls some 8,500 hectares of agricultural land. Following this acquisition, the area of agricultural land controlled and cultivated by Agrovaldymo Grupė has increased from some 17,500 to 23,500 hectares. 
So far the activities of Agrovaldymo Grupė have included cultivation of land and development of agricultural companies, while Žemės Vystymo Fondas has been engaged exclusively in the purchase, sale and lease of plots of land.
Amid implementation of the AVG strategy for enlarging its companies and introducing a centralised corporate management model, the company has estimated that the merger of these two companies can help to achieve additional operational efficiency and increase the value of the companies’ assets, i.e. the shares and plots of land of agricultural companies. “This is a significant step as Agrovaldymo Grupė plans to offer its shares on the stock exchange. It also intends to place a bond issue for the development of activities,” AVG Board Chairman Valentas Šulskis said. 
After the merger, AVG assets are expected to amount to over LTL 70 million. The merger of the companies will create preconditions for not only increasing the value of assets already controlled but also for boosting the total value of the groups of companies by acquiring new assets.  
According to preliminary data, consolidated profit of agricultural investment company Agrovaldymo Grupė in 2006 was higher than expected and reached LTL 5.428 million, up 1.7% year-on-year.  In 2006, earnings grew by 10.9% to LTL 25.551 million. According to the company’s representatives, the financial results were determined by increased manufacture of dairy products, changes in market prices and abandonment of loss-making types of activity.

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