Bulgarian dairy merger

The transaction, which was undertaken for an undisclosed sum, has been under negotiation since last autumn. However, it had to be investigated by the competition authorities, who finally gave their approval to the deal last month.

Vitalact Milk, which previously traded under the name Serdika, is one of the major producers of milk and yoghurt in the north-eastern region of Bulgaria.

OMK, which is currently co-owned by investment group Doverie and Greek venture capital fund Global Finance, includes the former state-owned milk plants in Stara Zagora, Plovdiv, Burgas and Shumen.

OMK has bought up the state dairies over the course of the last ten years when the sector underwent a period of rapid privatisation. Doverie made a many of its deals between 1996 and 1997, during which time a rash of such purchases were made by the major Bulgarian players.

OMK received a boost at the beginning of of 2003, when Global Finance became OMK shareholder after it injected BL10 million (€5.1m) into the company to become a major stake holder.

In 2003 Vitalact Milk's sales stood at €3.2 million. OMK says that its merger with the company will provide it with distribution channels in four of Bulgaria's big cities, providing a major boost to its sales in areas where it is not so well represented.

OMK's sales in 2003 stood at €11 million, and the company says that it hopes the merger will boost this year's turnover by at least 30 per cent.