Inside information: HKScan to sell its business in the Baltics

HKScan has signed an agreement to sell the shares in its Baltic subsidiaries AS HKScan Estonia, AS HKScan Latvia and UAB HKScan Lietuva, together comprising the Business Unit Baltics, to the Estonian AS Maag Grupp. The debt-free purchase price is EUR 90 million, of which EUR 20 million is conditional on the combined performance of the separately defined meat business subject to the transaction and Maag Grupp’s Baltic meat business in the following years. Of the EUR 70 million fixed purchase price, EUR 55 million will be paid at the closing of the transaction and the remainder over the next three years.

“The sale of the Baltic business will improve HKScan's profitability and strengthen its balance sheet. In addition, the divestment will enhance our ability to improve our operational efficiency and to execute our long-term strategy of growing into a versatile food company," says HKScan's interim CEO Juha Ruohola.

The divestment will change HKScan's structure and financial key figures. The Baltic business will be transferred to discontinued operations in HKScan’s full year 2022 financial statements. As a result of the transaction, the Group's net sales for 2022 are expected to decrease by approximately EUR 210 million, EBIT to improve by approximately 26 million and the comparable EBIT to improve by approximately EUR 11 million. In connection with the transaction, the Group is expected to reduce the book value of the Baltic business to approximately EUR 90 million at the end of 2022, which corresponds to management’s best understanding of future outlook after closing. The write-down will temporarily increase the Group’s net gearing ratio by an estimated 6 percentage points at the end of 2022. Upon closing, the net gearing ratio is expected to first decrease by approximately 19 percentage points and, as a result of subsequent payments of the fixed purchase price, by an additional 5 percentage points. The overall effect of the transaction is expected to improve HKScan’s net gearing ratio by approximately 18 percentage points.

Immediately after this stock exchange release, HKScan will publish another release, in which the company will explain the impact of the sale of its Baltic business on the terms of the bond issued in March 2021.

The transaction is expected to be closed in the second half of 2023 and it is subject to regulatory approvals in Estonia and Latvia. The businesses and personnel of HKScan’s Baltic subsidiaries will not be transferred to the new owner until closing of the transaction.

HKScan’s Baltic production units are located in Rakvere, Tabasalu and Viiratsi in Estonia and Jelgava in Latvia. The company’s consumer brands in the Baltics are Rakvere, Tallegg, Rigas Miesnieks, Jelgava and Klaipedos Maistas. In 2021, net sales for the Baltic business amounted to EUR 170 million (Q1-3/2022: EUR 143.6 million), EBIT was EUR -5.4 million (Q1-3/2022: EUR -26.6 million) and the average number of employees in the three countries is some 1 500. HKScan has operated in the Baltics since the summer of 1998.

AS Maag Grupp is an over 25 years old Estonian food company operating in the meat and dairy business. Maag’s net sales in 2021 totalled EUR 233 million and it employs some 1 000 people in Estonia, Poland and Finland. The company is known for its consumer brands Tere, Farmi, Deary, Rannarootsi, Rannamõisa and Pouttu.

“The acquisition of HKScan's Baltic business will help Maag strengthen its position and achieve the full synergies in the Baltic market. This will also provide us all better food security in turbulent times," said Roland Lepp, Chairman of the Supervisory Board of AS Maag Grupp. 

HKScan Corporation

Juha Ruohola
interim CEO

Further information:
Juha Ruohola, interim CEO, HKScan Corporation, tel. +358 400 647 160
Jyrki Paappa, CFO, HKScan Corporation, tel. +358 50 556 6512
HKScan Media Service Desk, by email: or tel. +358 10 570 5700