Leading Australian produce company Costa Group Holdings Limited has signed an agreement permitting it to acquire an additional 41% of the shares in African Blue SA.
The move gives Costa control of the Morocco-based blueberry grower-exporter and increases its shareholding in the joint venture to 90%.
Two of the founding shareholders in the company, Gailes Holding Ltd (21%) and Bennani Abdellatif (20%) have agreed to sell their shares to Costa. Costa will acquire 37% of the issued shares and options will enable it to acquire an additional 4% over the next three years.
Total Worldfresh – a subsidiary of the UK-based produce company Total Produce – retains a 10% interest, a release said.
The value of the initial 37% acquisition is approximately AU$68 million plus transactional costs. Completion of the transaction is expected to occur by the end of this calendar year.
“We are very pleased to have reached agreement with our joint venture partners to acquire their interests in African Blue and become the majority owner,” Costa Group CEO Harry Debney said.
“I want to acknowledge the important role our partners have played in contributing to the establishment of our blueberry plantings in Morocco and making the African Blue brand one that is recognized for its quality, particularly in the UK and European markets.”
The African Blue operations presently consist of five existing farms in Morocco, with total plantings of 253 hectares as of June 30. A further 63-hectare expansion is currently planned for the 2018 financial year.
“Our African Blue Moroccan operations are now an integral part of not only Costa’s international segment but also our overall business. The blueberry varieties that we grow in Morocco are from genetics developed by Costa originally in Australia, meaning we also control the IP,” Debney said.
“We believe this gives us a distinct competitive advantage in the UK and European markets as we are able to deliver a premium product into those markets.”
Currently, 40% of African Blue blueberries are sold in the UK and 60% in Europe. The season runs from January to June and beings up to six weeks ahead of the main blueberry growing region in Spain.
“Year-round demand from Europe and North America is one of the key drivers of the global berry trade. We are confident that we can continue to grow our share in not only the UK blueberry market but also through continental Europe,” Debney said.