Podravka will now need to transfer the EUR 33m it promised for a 55.55% stake sold by a consortium led by the state's SSH holding.

Slovenian law requires that Podravka, which has moreover secured a capital increase as part of the acquisition, publish a takeover bid for the remaining outstanding stock.

The 51.55% stake in what was one of the 15 companies on the government's privatisation list was sold by the SSH as the manager of state capital assets, insurers Modra zavarovalnica and Adriatic Slovenica, and several mutual funds.

Podravka chairman Zvonimir Mršić has announced Podravka wants to allow one of the biggest Slovenian food companies to expand internationally and broaden its consumer base: "Our goal in this acquisition has been for both companies to grow and perform better."

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

While the competition watchdog has cleared the sale, a potential issues related to it was raised in mid-August by Slovenian Agriculture Minister Dejan Židan.

Hew said "Croatia will need to explain to the European Commission in due time: is it true that Podravka was recapitalised by the state so it could acquire a company in another country as the publicly available information indicates?"

"If this is true it could be a case of illegal state aide, which would be against EU law," Židan told the weekly Mladina.