Greece’s Vivartia buys rival Mevgal to cope with recession

Greece's largest food group, Vivartia, has agreed to take control of rival dairy firm Mevgal as part of efforts to cope with a consumer slump in the recession-plagued, cash-strapped country.
The move to create Greece's top dairy group comes two days after Vivartia owner Marfin Investment Group (MIG), Greece's biggest investment fund, posted a record 1.4 bln euro first-half loss and said that mergers were the only way to cope with the crisis.
Greece is going through its deepest recession in almost 40 years after the government cut wages and hiked taxes to stave off bankruptcy and obtain a 110 bln euro bailout from the European Union and IMF.
Vivartia's first-half loss widened to 61 mln euros, hurt by a one-off corporate tax to help shore up the government's battered finances.
Under the deal, Vivartia's dairy unit will acquire a 58% stake in peer Mevgal for 77 mln euros. The move will generate annual synergies of 23 mln euros in three years' time, Vivartia said.
"The new entity can deal with the competitive challenges of our times and is expected to greatly contribute…to our country's economy," Vivartia Managing Director Dionyssios Malamatinas said in a statement.
MIG shares gained 4.3% to 0.97 euros by 1300 GMT, outperforming a 1% rise of the Athens bourse's general index.
Vivartia produces fresh milk and frozen foods and exports to 30 countries around the world. It also operates fast food chain Goody's in Greece, Cyprus and the Balkans.
Mevgal, owned by two Greek families, exports its products to 24 countries, including Japan and the United States.