Al Dahra, a UAE-based international conglomerate, specialising in the agribusiness, has signed an agreement to acquire acquiring the assets of PKB Korporacija and its subsidiaries in Serbia for Euro 150 million ($172 million), through an asset sale model transaction.

The acquisition is being undertaken as a result of Serbia’s objective to privatise PKB Korporacija, and follows a public tender issued in August 2018, reported Emirates news agency Wam.

The sale and purchase agreement was signed by Khadim Al-Derei, vice chairman and managing director of Al Dahra, and Dragan Stepanovic, Serbian Deputy Minister of Economy, in the presence of Mubarak Saeed Ahmed Bershid Al Dhaheri, UAE Ambassador to Serbia.

The operations that will be acquired from PKB Korporacija cover several different agricultural and food sector activities. In terms of farming, Al Dahra will manage and cultivate more than 50,000 acres of farmland, which is spread across eight farms, strategically located at close proximity to Belgrade city centre.

The different crops that will be produced include sugar beet 491 hectares; sunflower 2,136 hectares; wheat 3,552 hectares; corn 636 hectares; barley 1,454 hectares; soya 2,621 hectares; oilseeds 1,141 hectares; forage 2,322 hectares; silage 2,775 hectares; and a compound of feed and several vegetable varieties.

Al Dahra will manage the dairy operation and livestock business, which sell to the milk and meat production industries in Serbia.

Al Dahra has agreed, as part of the transaction, to invest Euro 30 million over the coming three years to enhance the farms, upgrade the irrigation infrastructure and modernize the dairy operation facilities. However, Al Dahra expects and is willing to invest a further Euro 15 million to optimise the farm and facilities.

Al-Derei stated: "The signing of the agreement is a special day for the UAE and Serbia. The addition of the PKB assets to our existing portfolio reinforces our position in Serbia and our regional presence in Europe and complements our vertical integration strategy, allowing the group to further grow in the grains trading, dairy and livestock segments. Al Dahra is committed to capitalise on the expertise and knowledge of the existing PKB workforce and is equally committed to maintain PKB products as a source of supply for Serbian citizens, building on its tradition.”

"We believe that the privatisation of PKB and the investments that Al Dahra will be injecting to upgrade the existing operations and infrastructure, will enhance the commercialisation and internationalisation of Serbian crops and will ultimately benefit the Serbian farmers, traders and wider agricultural sector. Al Dahra looks forward to strengthening its relationship and ties with Serbia and the Serbian people through its investments in Serbia," he added.

In turn, Al Dhaheri said that this agreement reflects the credibility and mutual trust between the UAE and Serbia, pointing out that the acquisition of BKP by Al Dahra is a culmination of the durability of the relationship between the two countries and a solid proof of the great reputation that Al Dahra has in the international market.

For his part, Stepanovic valued the UAE-Serbian relations, particularly in the economic, trade and investment fields, saying, "We thank the UAE and Al Dahra in particular for choosing Serbia as an economical partner, as this is not a new initiative, the cooperation between the two countries are vast."

He also emphasised the importance of this agreement which came as a result of the continuous hard work by the two parties, pointing out that Al Dahra is an important partner for the Serbian government and is capable to take this partnership to a global level.

Al Dahra will be working jointly with Serbia to complete the transaction and assets’ transfer over the coming period; ensuring a smooth transition for all parties involved.