The contract was signed on Thursday, but the price was not disclosed.

A business daily has however recently reported the Grosuplje-based bakery is unofficially worth around 30 million euros.

Mercator chairman Toni Balažič believes that with Don Don, Pekarna Grosuplje has got a strategic partner which will facilitate development.

Don Don's presence on foreign markets will also enable Pekarna Grosuplje to boost its export orientation, Balažič was quoted in a press release as saying.

The transaction is expected to be closed by the middle of the year, pending regulatory approval, said Mercator, which was acquired by Croatia's Agrokor last year.

Last year Pekarna Grosuplje baked 15,200 tonnes of products, which makes it the second largest bakery in Slovenia, following market leader Žito.

The origins of the company, which employs more than 200 workers, go back to 1951, when it supplied only the town of Grosuplje and nearby villages.

Its products entered Ljubljana in the early 1970s, when it also started to supply Mercator.

The two companies started closer cooperation in 1978, but Mercator became its owner only in 2008.

Pekarna Grosuplje makes 90% of its 25 million euros in annual revenue on Mercator shelves.

Bakery Don Don was meanwhile established in 1994 and became 100% owned by Amal, a company based in Liechtenstein in 2004.

In 2013 it posted 9.5 million euros in sales revenue, mostly on the Slovenian market, and a net profit of 652,000 euros.

Last year it employed almost 45 workers.