Breton Cooperatives Prepare to Sell Gad22 September 2011
FRANCE - The Gad pig processing operation in Britanny is to be sold. Possible regional buyers for the €700 million a year group include cooperative Cooperl Arc Atlantique and the Bigard-Socopa processing joint venture.
Other names have been mentioned but remain unconfirmed. The management of Intermarché's meat subsidiary, SVA, has seen the Gad figures and the business is large enough to attract the interest of outside bidders.
The size of the Gad business unit also means that the interministerial industrial restructuring committee, CIRI, will need to approve the final deal. Potential rival buyers, Cooperl Arc Atlantique and Bigard-Socopa, are already the two largest pig processors in the country.
In the spring this year, the giant Breton agricultural cooperative, CECAB, became the majority shareholder with a two-thirds stake alongside fellow cooperative, Prestor. At that time, the stakes held by the founding Gad family, Unigrains and a subsidiary of the bank Crédit Agricole were bought for an undisclosed sum.
Caught between a rock and a hard place, the €2 billion-a-year CECAB is choosing to relinquish the downstream pig processing capacity that it had built up over the past four years, when it first took a stake in the Gad business. Over the summer, CECAB approached CIRI about Gad and the 2010 annual report warned that ‘the pigmeat problem is one of retreating margins, notably linked to the degradation of retail prices of premium cuts’.
Although Cooperl Arc Atlantique is in the running to make a bid, it has been investing heavily in the west coast pig sector in the wake of its 2009 Arca merger, as well as buying the former UNICOPA Brocéliande curing plant in 2010. President Guy Dartois told journalists that the cooperative had hesitated before considering a bid, but proceeded on the grounds that in the long term the cooperative movement had to be part of the region's pig industry restructuring.
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