MK Group d.o.o., a Serbian diversified holding company that focuses on agribusiness, won’t be able to buy Hellenic Sugar Co. as the acquisition would push its market share in Serbia to 78 percent, the country’s market regulator said today.
The Commission for the Protection of Competition banned further “concentration” in the Serbian sugar market that would arise from the acquisition and rejected MK Group’s offer to sell one of its sugar units within three years and to cap sugar prices, according to a statement posted on its website.
MK Group wanted to carry out the transaction through its sugar producing unit Sunoko d.o.o., which is also a member of Germany’s Nordzucker Gmbh & Co KG. Its portfolio of four refineries in Serbia would have expanded to six units.
MK submitted a non-binding offer for 82.33 percent of Hellenic Sugar last year, when its owner, the Agricultural Bank of Greece SA, decided to sell non-banking activities. The tender initially drew 11 potential buyers and the race has boiled down to the Serbian holding and Suedzucker AG, MK Group’s owner Miodrag Kostic said in an interview yesterday.
Sunoko said in an e-mail that the regulator’s decision was “unfounded” as it “inflicts damage” to the Serbian sugar industry and interferes with “the strengthening of competitiveness and the concentration of production capacities, necessary to prepare for strong competition in the EU markets.”
Serbia exports around 100,000 tons of sugar to Greece worth between 70 million euros ($92 million) and 80 million euros a year, accounting for 65 percent of an annual sugar export quota the country has with the European Union.