Vivartia Holdings SA on Wednesday announced the signing of a pre-contract for the purchase of a majority share in Mevgal SA, a Greek dairy company.

The purchase agreement was signed with the Papadaki-Hatzitheodorou family - owners of 43 pct of the Mevgal equity capital - while Vivartia Holdings has already reached a similar agreement with the Hatzakou family - another major shareholder in Mevgal. Under the agreement, Vivartia Holdings will buy at least 57.8 pct of Mevgal’s equity capital through its subsidiary Delta Foods SA.

Vivartia Holdings said the purchase will be completed in two phases: first, buying a 14.8 pct stake in Mevgal from Hatzakou family for 19.6 million euros, along with an option for buying an additional 13.6 pct equity stake and second, buying a 43 pct stake from Papadakis-Hatzitheodorou family for 57 million euros.

Mevgal SA was founded in 1950 and it is the largest dairy industry in northern Greece. Its 2009 turnover totaled 184 million euros with pre-tax, interest and amortization earnings totaling 11 million euros.

The new group, resulting from the merger of Delta and Mevgal will have annual sales of 640 million euros, of which 500 million euros domestically and 140 million euros abroad.

Dionysios Malamatinas, Vivartia’s chief executive, commenting on the deal said:

“We are particularly satisfied with the takeover deal with Mevgal. Our aim is to give greater value to the new group and offer our consumers the benefits of creating a national champion, maintaining our established growth, innovation and quality course. The new group will be able to overcome competitive challenges of our times and contributing to the support and growth of Greek cattle-breeding industry and of the Greek economy in general”.