Dubai : Abu Dhabi state-backed food and beverage company Agthia Group has acquired Turkish spring water producer Pelit Su in a deal signed yesterday, the UAE company announced.
The transaction is expected to close during the first half of 2012, Agthia said in a statement yesterday. The value of the deal will remain undisclosed until the transaction is closed next year, the company's public relations officer said.
"Agthia's acquisition of Pelit Su is in line with our geographic expansion strategy," said Rashed Mubarak Al Hajeri, Chairman of Agthia Group.
Acquisition of the company in Adana in southern Turkey gives Agthia access to spring water originating from the Toros Mountains.
"The acquisition of Pelit Su, Turkey, will mark our second international expansion, reinforcing our mission to deliver superior value to our stakeholders. The venture will provide access to high quality spring water facilitating Agthia's growth into higher margin premium spring bottled water, targeting not only Turkey and the UAE but the wider GCC and beyond," said Ilias Assimakopoulos, Agthia group chief executive.
The deal gives Agthia an existing manufacturing plant with three bottling lines and additional space for potential capacity expansion over 23,000 square metres of land.
"The company has demonstrated a healthy performance and has successfully provided quality pure spring water to the region," said Murat Pelit, Chairman of Pelit Su, a family-owned business.
The acquisition comes amid a flurry of food investments by the UAE in agricultural countries when sharp commodity prices this year raised food security concerns. Agthia recently teamed up with French yoghurt-maker Yoplait and invested $13 million (Dh47.74 million) in a new plant to produce a specific selection from the Yoplait range.
"We have grown significantly in the last four to five years — we are in dairy and juices and this year moved into fresh juices as well," said Fasahat Beg, general manager of Agthia's consumer business division, in earlier comments. "We are a leader in [bottled] water. We have been pretty deliberate in the way we have gone about securing our presence in new categories. The intention is to create synergies rather than cannibalising any of the existing products. It has worked well for us."
The UAE is leading the region in merger and acquisition deals according to an Ernst and Young report.
The number of merger and acquisition deals in the Middle East and North Africa (Mena) increased 43 per cent to 96 in the second quarter of 2011 over the same period last year, according to the report.