The Estonian Competition Authority satisfied the application of AS Maag Grupp on the merger of AS Tere with AS Farmi Piimatööstus. During the first stage of concentration, Tere will continue to operate as a subsidiary of Farmi Piimatööstus. The trademarks of both companies will be retained; the long-term strategy of the concentrated companies will be drafted in the course of the implementation of the reorganisation plan.
“During the first stage of concentration, Tere will continue as a subsidiary of Farmi Piimatööstus and a dignified and trustworthy partner to all Estonian dairy producers and customers in cooperation with its parent company,” Chairman of the Board of Maag Grupp Roland Lepp said. “With this merger, we will achieve the financial stability and security that the milk producers, employees of the company and creditors have missed. Tere’s range of products is diverse, of high quality and it has a good reputation among consumers, but the financial side has been a source of insecurity. The decision of the Competition Authority will significantly improve the health of Estonian agriculture.”
“The price of raw milk depends on the export capacity of dairy products and the price level on the global market, but local producers have an important role in ensuring production capacity and the stability of the dairy market,” Lepp said. “The merger of two dairy companies will have a positive impact on agricultural and production enterprises throughout Estonia, and it will help to increase their competitiveness on the export markets. Our plan is to grow strongly – we believe that with concentrated companies, we will be able to achieve more beyond the borders. The synergy of two companies will create good conditions for that.”
“The merger will give Tere the possibility to continue production and to use the existing potential more effectively,” CEO of AS Tere Margit Talts said. “We will use the production potential that has been unused until now to set more value to Estonia raw milk, we will also be able to considerably increase the production of skimmed milk powder. We will try to make the work in concentrated companies more effective – greater production capacity will create preconditions for the specialisation of units.”
According to Margit Talts, connected undertakings that look beyond the Estonian market will be created following the merger. “Concentrated companies have better opportunities together for increasing export, as well as sufficient production capacity for enhancing sales volumes in neighbouring countries,” Margit Talts said. “Tere is actively dealing with product development – in July, the design of its main milk cartons will be updated, one of the oldest and most beloved products Merevaik will get a package with an anniversary design, and in the autumn we will bring new product lines to the market.”
On 15 March this year, Maag Grupp submitted an application for the merger of Tere and Farmi Piimatööstus to the Estonian Competition Authority, and on 4 June, the Competition Authority issued a permit for concentration. The permit enables Farmi Piimatööstus to acquire the shares of Tere.
During the first stage of concentration, Tere will continue to operate as the subsidiary of Farmi Piimatööstus.
The reorganisation plan of Tere is still awaiting an approval.
The Tere AS (www.tere.ee) trademark was established in 1996. Tere is a sales and production company with an extensive range of products. It has grown from a milk processor into an innovative company. Tere’s main activities are buying up raw milk, production and the sale of dairy products. Its list of products includes more than 150 high-quality products.
AS Farmi Piimatööstus (www.farmi.ee) as a trademark has been on the Estonian market since 1999 and, since 2008, it has had the same management as today. This has brought along a serious development leap to a dairy brand with the largest capacity among the brands belonging to domestic capital. During the last decade, Farmi has been the main product developer, and year-on-year it has generated greater loyalty among consumers; its products have several times been awarded the title of the Best Estonian Dairy Product. The company collects raw milk from Estonia alone; its production units are located in Virumaa. The company employs 220 people across Estonia.
AS Maag Grupp (www.maag.ee) is a company based on the Estonian capital, which started its activities in 1996 and has since grown into a group of companies dealing with the production and sale of food products. AS Maag Grupp incorporates the companies Farmi Piimatööstus, Rannarootsi Lihatööstus, Pouttu, Avalon Foods, Maag Food, Gelid Food and Nigula Piim.