Excelent, Romania's second-largest sweets maker, is planning a merger by absorption with Kandia, the market's third-largest company.
Excelent already holds a 62% stake in Kandia, whereas the merger had been expected ever since last spring, when investment fund Rivta GmbH relinquished control over Kandia for $6 million.
The new company resulted from the Excelent-Kandia merger will also be controlled by an investment fund - East Europe Development Fund, which bought Excelent through Axis Investments in 1999.
The Kandia-Excelent merger could propel Excelent to number one, as its market share could reach 39%. According to the latest estimates, Excelent ranks second with 27% market share, behind Kraft Foods Romania (35%). Kandia comes third, as it holds 12% market share. The chocolate market has been through significant changes in the past few years, despite the decreasing purchasing power quoted by most of the producers.
Thus, local companies such as Excelent, Kandia and relative newcomer Primola, have come up with increasingly bold and costly campaigns.
At the same time, Kraft has been losing ground, from its 60% chunk of the market several years ago, to its current 35% share. The slump came as a result of the aggressive marketing campaigns endorsed by its rival companies, but also due to their broadening range of products.
Excelent posted 54bn ROL ($1.6m) net profit in the first half of 2003, up 45% from the year-ago period. Turnover reached 441 billion ROL ($13m), up 20% from H1, 2002. The company's budget has scheduled $28.5m turnover for 2003, 10% more than the figures posted last year.
Excelent is listed on the Bucharest Stock Exchange, where its stock was trading at 4,850 ROL/share at the end of last week. Kandia is listed on Rasdaq electronic exchange, with the trading price standing at 940 ROL/share.
claudia.covaci@zf.ro ; laurentiu.ispir@zf.ro
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