PARIS (Reuters) - France's largest poultry processor, LDC (PA:LOUP), said on Wednesday it has agreed to acquire Hungarian group Tranzit, continuing its expansion in Europe.
The takeover will give LDC a production base in Hungary for geese and ducks and a significant export business to Germany, the French group said.
The acquisition, subject to regulatory clearance, will see LDC take a 70 percent stake for an undisclosed sum, with Tranzit's family owners retaining the remaining 30 percent.
Tranzit had sales of 108 million euros (94.7 million pounds) last year and earnings before interest, tax, depreciation and amortisation (EBITDA) of 20 million euros, LDC said.
"We have a European project and Hungary is a stage in that," Chairman Denis Lambert told reporters, declining to specify other countries or potential targets LDC was looking at.
LDC has in recent years developed operations in Poland in parallel to further expansion in the French market.
The group this month won approval from a French court to acquire assets from insolvent rival Doux, an export-focused poultry producer that has struggled to compete against cheaper Brazilian chicken in the Middle East.
LDC said production sites secured from Doux would help it further increase its chicken volumes in a growing French market, although the difficulties of French peers meant imported chicken was maintaining market share above 40 percent.
Reporting results for its financial year that ended on Feb. 28, LDC said full-year current operating profit rose to 184.7 million euros from 176.6 million euros a year earlier.
That surpassed its forecast for a stable operating profit, partly because commodity costs for its convenience food division rose less sharply than expected, it said.
Net profit rose to 140.7 million euros from 130.3 million.
For 2018/19, the group said it targeted stable current operating profit for its main poultry division, and increases for convenience food and international businesses, which Lambert said suggested a slight rise in overall operating profit.
However, he cautioned that the outlook was subject to commodity costs. Further inflation in cereals and soybeans - used in poultry feed - after price rises in recent months could lead it to renegotiate tariffs with customers, Lambert said.