Since 2005, Swedish-backed Black Earth Farming has emerged as a major landowner in southwest Russia, holding more than 600,000 acres (244,000 hectares) as of 2015. But yesterday, the company announced it has entered into an agreement to sell its Russian operations, distribute the proceeds to its shareholders, and initiate a voluntary liquidation of the company.
According to agrimoney.com, it is the most high profile move yet in a series of foreign investors exiting Russia’s Black Sea agricultural market. The buyer is Volgo-DonSelkhozInvest, which is owned a family of Russian oil oligarchs.
“Out of the several discussions we have conducted with interested parties, I am satisfied the transaction being proposed is the most favorable for Black Earth Farming’s shareholders in terms of both value and risk,” says CEO Richard Warburton. “I am also especially pleased that the transaction provides continuity and stability for the company and its employees.”
The estimated purchase price is $184 million.
Black Earth Farming has a contract with PepsiCo to grow sugarbeets and potatoes, and it also raises wheat, oilseeds and other crops. As agrimoney.com notes, the company struggled through various local and global factors, including lower wheat prices and Russian sanctions following its invasion of Crimea.
For more information, visit http://blackearthfarming.com/.