In one quick swoop, Danish Crown is set to become the fifth-largest slaughterhouse in Germany and simultaneously enhance its credentials as a major player in northern Europe’s burgeoning organic meat market.
The purchase price has not been disclosed, but this site believes the deal is valued in the region of tens of millions of euros. Privately owned Teterower Fleisch has 187 staff and there are no plans to change the workforce immediately. The management team will also stay in place to maintain the company’s strong local connections, but Danish Crown will supplement the team with management resources of its own.
President and group CEO of Danish Crown, Jais Valeur, said the German business “ties in beautifully” with the pork processor’s new 4WD strategy , which aims to position Danish Crown as the market leader in northern Europe.
Organic meat targeted
“We want our beef division in particular to grow and to account for a larger share of Danish Crown’s total activities – while at the same time focusing more on organic products and adding value,” said Valeur in a press statement.
Close to 20% of the cattle Teterower Fleisch slaughters annually is organic. The business also slaughters pigs and lambs, but beef is the priority. This focus fits in nicely with Danish Crown’s beef operations in the country, as it already slaughters about 90,000 cattle per year in Husum, northern Germany.
Danish Crown currently operates five cattle plants, four in Denmark and one in Germany, generating around DKK4.3 billion (€500m) in annual revenue with a workforce of 885.
- Turnover of €150m
- Slaughters 110,000 cattle annually
- Workforce of 187
- Located in Mecklenburg-Vorpommern, northern Germany
Danish Crown Beef CEO Finn Klostermann said he was “convinced” that integrating larger access to raw materials would “generate further growth” for both companies. The deal will also allow Teterower Fleisch to access Danish Crown Beef’s markets worldwide.
When Danish Crown announced its 4WD strategy in November 2016, it stressed that Germany no longer held the same strategic importance as Denmark, Sweden, Poland and the UK. In light of this, the acquisition of Teterower Fleisch might seem a little surprising.
Klostermann has addressed this peculiarity, stating more than 50% of Teterower Fleisch’s sales take place outside Germany and, crucially, in the geographic sphere that Danish Crown Beef identifies as growth opportunities: mainly Sweden and southern Europe.
The move will not see Danish Crown enter the “highly competitive” German retail sector; Klostermann said the business did not believe it “can make money there”.
The takeover has been reported to the German federal cartel office (the Bundeskartellamt), which must approve the acquisition before it is finalised.