KIEV, UKRAINE — Alpcot Agro and Landkom announced on Dec. 20 that they have reached an agreement for Alpcot to acquire Landkom.

Under the terms of the agreement, Landkom shareholders will receive one Alpcot share for every 22.16 Landkom shares. The exchange ratio has been derived from published net asset values, following adjustments, given that both Alpcot Agro and Landkom trade at significant discounts to net asset value, the companies said.

Once the acquisition is complete, current shareholders of Alpcot Agro will own 83% of the company and Landkom shareholders will own 16.43%.

The Alpcot Agro board of directors said it plans to list the company on the main market of the London Stock Exchange during the second half of 2012, and later seek a listing on the main market of NASDAQ OMX Stockholm.

“We are very excited about the opportunity to combine Alpcot Agro's and Landkom's operations. The proximity of our land banks in Western Ukraine enables multiple synergies. The balance of the combined entity's operations between Western Ukraine, Kaliningrad, and the Central Black Earth region in Russia allows us to mitigate any significant weather events,” said Katre Saard, director of Alpcot Agro Ukraine. “In both countries, we will have potential for significant improvements in crop yield. Both companies have made large strides in the last year toward improved financial performance, and we believe that our accumulated experience and the efficiencies created in the combined entity will increase the pace of these improvements.”

“Our ambition of becoming a substantial producer and processor of agricultural commodities for the global food and biofuel markets has become increasingly difficult to fulfill without access to substantial additional working capital. We need to refinance an important proportion of our working capital facilities if we are to operate effectively as a stand-alone entity and maintain, let alone increase, today's level of cropping,” said Neil Balfour, chairman of Landkom. “This recommended takeover provides Landkom with the financial stability to realize the full value of our attractive assets in Ukraine and its shareholders with the opportunity to be part of a much larger, multi-national group with more diversified operations and assets.