The Slovenian meat processing company Celjske Mesnine has been sold to the Croatian company Mesna Industrija Braća Pivac. The news comes just two weeks after a majority stake in Slovenia's leading agri-food company, Panvita, was acquired by Croatian services company Mplus.

Like in the case of Panvita, the takeover contract for Celjske Mesnine has been signed, but will take effect when regulatory approvals have been obtained.

The Celje-based company said the new strategic owner is taking over the group's main production and processing company Celjske Mesnine Z'dežele; prosciutto company Pršutarna S' Krasa; and Celjske Mesnine - Storitve, which employs disabled persons.

Meanwhile, the wine making comapany Radgonske Gorice remains in the hands of Izidor Krivec, who will stay on as chairman of the Celjske Mesnine board.

Krivec controlled Celjske Mesnine through a majority stake in the company that has now signed the sale agreement.

He said in a press release that the entry of a strategic partner was good news for the group, its employees, suppliers and consumers.

Biggest buyer of livestock

Celjske Mesnine is the largest buyer of livestock and red meat processing company in Slovenia, which Krivec said was not going to change in the future.

"The meat industry in Slovenia and the broader region is undergoing a process of integration. The market is increasingly open. Companies with multi-billion turnover are directly entering our shelves," Krivec was quoted as saying.

"This partnership will therefore be mutually beneficial, enabling the further growth of Celjske Mesnine and the new group, which will be the largest and most successful in the red meat sector in the region," he added.

He pledged for the company to remain a reliable partner of Slovenian cooperatives and family farms, and one of the key suppliers of Slovenian consumers with good quality Slovenian food.

Mesna Industrija Braća Pivac has own meat production and processing facilities in Croatia and in order to optimise production and boost distribution efficiency, it plans to consolidate part of the production in Celje.

CEO Neven Pivac sees the deal with Celjske Mesnine as a logical integration of strong companies, saying they see Celjske Mesnine as a company with great potential.

The new owners promised to take a strategic approach to keeping the Slovenian brand of Celjske Mesnine on the market.

Apart from Mesna Industrija Braća Pivac, the family-owned Pivac Group includes two more meat companies, PKK Karlovačka Mesna Industrija and Mesna Industrija Vajda.

Mesna Industrija Braća Pivac owns Croatian candy company Kraš and has more than 5% in Croatian food company Podravka, which in turn owns Slovenian bread and pasta company Žito.

Concerns about sale of food companies

The sale of Panvita in particular has raised concerns in Slovenia, mainly because its long-term lease of 3,000 hectares of state-owned farmland.

While Panvita CEO Toni Balažič dismissed concerns, saying the company will responsibly manage the land it leases from the Farmland and Forest Fund, agricultural economics expert Aleš Kuhar described the sale as a sign of immaturity and foolishness shown by Slovenian politicians for the past 20 years.

He believes the country's food chain is "devastated and demolished" because they failed to promote efforts to strengthen or maintain large agri-food systems.

According to him, the case of Celjske Mesnine is similar to Panvita's in that it involves a debt-beset company. Both were made up of companies that were major food market players even before Slovenia's independence.

In his view the government should have found a way to help Panvita, and it should help promote a better investment environment.

Meanwhile, the newspaper Delo has reported unofficial speculation that the the decision to sell Celjske Mesnine has resulted from a dispute between the owners.

Delo finds that such acquisitions do not come as a surprise, considering that Croatia has a robust agri-food industry, its pension funds have accumulated a lot of capital and are seeking investment opportunities, as do private investment funds.

Panvita is now indirectly in the hands of Croatian public pension funds. At the end of 2023 its Croatian owner received a €60 million financial injection from the EBRD, according Kuhar.