ANNOUNCEMENT 19 Jun 2018

In June 2018, the Nordic Investment Bank (NIB) signed a loan agreement with Danish Crown A/S to support its acquisition of the Danish company DK-Foods and Polish Gzella Meat Group. Additionally, the loan will support the company's construction of a meat processing plant located in China.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Nordic Investment Bank, agreed loans, Denmark. Danish Crown A/S: https://www.nib.int/what_we_offer/agreed_loans/632/danish_crown_a_s
The Nordic Investment Bank, Questions & answers: https://www.nib.int/who_we_are/q_a
Danish Crown A/S: https://www.danishcrown.com/b2b/pork/offices/
Danish Crown, press release of 31 May 2018, Sokołów-koncernen afslutter køb af Gzella Meat Group: https://www.danishcrown.dk/presse/nyheder/soko%C5%82ow-koncernen-afslutter-koeb-af-gzella-meat-group/

Inception date: 19 Jun 2018 | Removal date: open ended
Still in force

State loan

On 19 June 2018, the Nordic Investment Bank (NIB) and Danish Crown A/S signed a loan agreement having a total value of EUR 100 million (approx. USD 116 million). The loan will support the company's acquisition of the Danish company DK-Foods, a pepperoni producer. Notably, the acquisition was completed in May 2018. The maturity of the loan is 7 years. 

According to the NIB, the acquisition will support: "Danish Crown’s strategy to become a global leader in canned products, snacks and other profitable segments in food service." Notably, the loan also supports the Danish company's acquisition of a Polish company as well as the construction of a meat processing plant in China, see related intervention. 

Danish Crown A/S has its headquarters in Denmark with 14 offices worldwide. The company is a meat processing company providing various meat products of pork or beef including fresh packaged meats. According to the company, the Group is the largest pork exporter in the world "selling pork cuts in more than 80 countries worldwide."

The NIB is an international financing bank and is jointly owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The bank provides financing to private and public projects mainly located in the eight countries at attractive conditions. The eligibility criteria of NIB financing is that: "All projects financed by NIB should improve competitiveness and/or the environment, in accordance with NIB's mandate and eligibility criteria. Furthermore, outside the membership area, projects financed by NIB should be of mutual interest to the country of the borrower and the member countries." 

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory.

AFFECTED SECTORS

 

AFFECTED PRODUCTS

 
Inception date: 19 Jun 2018 | Removal date: open ended
Still in force

Financial assistance in foreign market

On 19 June 2018, the Nordic Investment Bank (NIB) and Danish Crown A/S signed a loan agreement having a total value of EUR 100 million (approx. USD 116 million). The loan will support the company's acquisition of the Polish company Gzella Meat Group as well as the construction of a meat processing plant in China. The maturity of the loan is 7 years. 

The Polish company is a producer of various meats and cold cuts of pork, beef and chicken. The company owned a processing plant, a number of logistics centres and 250 retail stores. The Polish subsidiary of Danish Crown Sokolow Group acquired the company in May 2018.

The construction of the meat processing plant will be located in Pinghu, China. According to the NIB, the plant is expected to produce up to 14,00 tonnes annually. The plant will mainly produce "fresh meat cuts, fully cooked products and semi-cooked products" using the Danish raw pork and other meats. 

In this context, the NIB stated: "The new meat processing plant in Pinghu, close to Shanghai, will utilise raw material from existing slaughter houses in Denmark. Production at the plant will complement exports and provide access to new business segments. This is expected to enlarge the geographical market for processed meat and secure direct access to a high consumer growth market." Additionally, the bank noted that the: "acquisition of the Gzella Meat Group adds a local high-end brand to the Polish product portfolio."

Danish Crown A/S has its headquarters in Denmark with 14 offices worldwide. The company is a meat processing company providing various meat products of pork or beef including fresh packaged meats. According to the company, the Group is the largest pork exporter in the world "selling pork cuts in more than 80 countries worldwide."

The NIB is an international financing bank and is jointly owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The bank provides financing to private and public projects mainly located in the eight countries at attractive conditions. The eligibility criteria of NIB financing is that: "All projects financed by NIB should improve competitiveness and/or the environment, in accordance with NIB's mandate and eligibility criteria. Furthermore, outside the membership area, projects financed by NIB should be of mutual interest to the country of the borrower and the member countries." 

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the investment support granted here is discriminatory.