Prepared Foods November 1, 2004 enewsletter

U.S. agricultural products and fertilizer maker Cargill said it will buy a majority stake in Romanian edible oil producer Olpo.

An agreement has been reached with Olpo's holding company Topway and its shareholders, pending the completion of due diligence procedures and regulatory approval, Cargill said in a statement.

The deal is to be completed in a few weeks. Financial details were not immediately available.

Olpo should benefit from Cargill's global experience in the crushing, refining and bottling areas, as well as from its extensive network of storage facilities in Romania to facilitate the supply of raw materials, the company said.

"This is a positive development for all parties and will allow us to extend our range of products to consumers whilst maintaining the high quality levels they have grown to expect," Topway main shareholder Andreas Friedmann said.

Olpo processes mostly locally grown sunflower seeds. It employs more than 600 people and has production facilities in Podari and Craiova, both in southwestern Romania. The company produces bottled oil under two brands, Olpo and Bunica.

It is currently completing the construction of a new crushing line that will double its processing capacity to some 1,200 tons daily, making it the one of the largest oil factories in southeastern Europe. U.S.-based Cargill is a global player in the food, agricultural and risk management products and services sectors, employing 101,000 people in 59 countries.

Cargill entered the Romanian market in 1996, focusing on the domestic wheat market as well as on the trading of feed barley, maize, sunflower seeds and soybeans. It now employs more than 900 people.

Earlier this year, Cargill completed its acquisition of grain company Comcereal, which has a network of grain storage facilities in the Romanian grain belt in the southern part of the country.