Slovenian law requires that Podravka publish a takeover bid for the remaining outstanding stock. The deal values the entire company at EUR 64m but the actual price will be lower since Žito has treasury shares worth about a tenth of the entire issue.

"We've achieved the maximum price possible and exceeded expectations," SSH chairman Matej Pirc told the press as the deal was announced. He said Žito would get a strategic investor from the industry and "a clear development vision".

Podravka wants to allow Žito to expand internationally and broaden its consumer base, chairman Zvonimir Mršič said. "Our goal in this acquisition has been for both companies to grow and perform better."

He said Podravka wanted to be a consolidator of the food industry in the region, with Žito a stepping stone in the process.

While Mršič said the company did not yet have specific plans about Žito's locations and headcount, a key concern of the trade unions, he said Podravka had assumed commitments under a five-year in-house collective agreement that was signed at the end of last year.

The stake was sold by the SSH, the manager of state capital assets, insurers Modra zavarovalnica and Adriatic Slovenica, and several mutual funds.

The price is over 10 euros above Žito's closing price on the Ljubljana Stock Exchange on Monday, before trading was suspended this morning.

The Žito management welcomed the deal. "We believe and hope that the new owner is a strategic long-term investor who will leverage the entire potential of the company and synergies in the food industry across the region," Žito CEO Janez Bojc said in a press release.

All four representatives of shareholders on the supervisory board tendered their resignations today conditional on the completion of the sales procedure.

The sales procedure is expected to be wrapped up in a few months pending approval by regulators.

Žito is the fourth company on the 2013 list of 15 firms slated for the current round of privatisation to be sold, following in the footsteps of coatings maker Helios, laser maker Fotona and airport operator Aerodrom Ljubljana.