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Agrokor Sells Part of Tisak to British American Tobacco

What will happen with the Croatia’s largest newsstand chain?

With the recent purchase of Adris’ tobacco business, British American Tobacco (BAT) also acquired 25.8 percent of Tisak, shares which are owned by the Rovinj Tobacco Factory (TDR). BAT has now increased its stake in the largest domestic chain of newsstands by additional 16 percent. Agrokor announced on Wednesday that it had signed a contract about the transaction with TDR, reports on August 11, 2016.

With this transaction, TDR has gained 381,854 shares and now it owns 42 percent of Tisak, while Agrokor retains 51.3 percent of shares. Agrokor’s statement regarding the transaction was rather vague and short. The price, as expected, remains unknown, but the same is true about the motives and the nature of this sale. They only said that “Tisak is the market leader in introducing new and innovative services and products, and this transaction will enable additional investments in the modernization, efficiency and increased operational security”.

Although Tisak’s semi-annual report suggests an increased investment activity this year (200.5 million kuna), business community is looking for other explanations. A part of it believes that this purchase of shares could be a kind of prelude to BAT’s takeover of Tisak or at least one step toward such a scenario, while others see the move as motivated by Agrokor’s liquidity issues and needs related to debt servicing.

In business circles there have been speculations for some time now (after last year’s half-billion-euro BAT’s takeover of TDR) about the fate of Tisak. The distribution network has been mentioned as an important part of that deal, including the price paid. In other countries where it operates, BAT does not usually tend to acquire retail chains, but the situation is somewhat different in Croatia. Of course, the takeover scenario would require the approval of the Croatian Competition Agency and it would involve measures related to regulations on concentration and market competition.

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