Cherkizovo acquires NAPKO in land-bank enhancing deal

Russian meat and feed producer Cherkizovo is acquiring NAPKO, which is a large grain producer in that country.

Cherkizovo said, among other assets, it would acquire NAPKO's agricultural land of 147,000 hectares located in the Lipetsk, Tambov and Penza regions.

Following the acquisition, Cherkziovo said its total operating land bank would rise to 287,000 hectares.

"As part of the transaction, the group will also acquire the supporting production infrastructure to cultivate the land and store the grain," the company said.

Chief executive Sergey Mikhailov said while organic growth was Cherkizovo's priority, the deal was an example of the strategic M&A opportunities it was ready to explore to further strengthen its vertical integration, supply chain and business model generally.

"By extending our land bank we will increase our self-sufficiency in grain and focus on synergies and efficiencies to reduce our unit production costs," said Mikhailov.

"Following this acquisition, we expect to increase our self-sufficiency in grain to 60% in the next few years from 30% at the end of 2016."