March 30, 2011

OJSC Cherkizovo Group (LSE: CHE) one of Russia's leading integrated and diversified meat producers announces that it has reached an agreement to acquire 100% of Mosselprom.  The proposed transaction is fully in line with Cherkizovo’s development strategy.  

Cherkizovo Group is one of Russia’a leading food production companies and it enjoys leadership market positions in poultry, pork and meat processing. 

Consistent with Cherkizovo Group’s strategy of dynamic development, the Group has reached an agreement to potentially acquire a 100% stake in Mosselprom, a large diversified vertically-integrated agro-industrial holding company. The transaction may be completed following and based upon legal and financial due diligence. The transaction is also subject to the mandatory review and approval by the Russian anti-monopoly authorities.   

The inclusion of this large producer into the Cherkizovo Group may significantly increase the scope of the Company’s activities, bring one of the best known Russian brands to Cherkizovo’s consumer brand portfolio, strengthen Cherkizovo’s positions in the high-margin Moscow region market and also increase Cherkizovo’s market share in the Russia’s poultry segment (in 2010 Cherkizovo Group had 7% of the market and Mosselprom – 2%)[1].  

Mosselprom was established in 2000 and is a holding company of a diversified vertically-integrated agro-industrial group, which production activities include the following main segments: poultry, pork, feed production and grain businesses. 

[1] According to RosPtitseSoiuz data