3. Juni 2019, Brussels Share Deals: the Case of KTG AGRAR SE Jobst - - PowerPoint PPT Presentation

Share Deals: – the Case of KTG AGRAR SE

Jobst Jungehülsing Head of Division 423 „Land Market“ Tel.: 030 / 18529-4450 Email: jobst.jungehuelsing@bmel.bund.de

“Share Deals” – new challenges for the farmland market?

• 3. Juni 2019, Brussels

Bundes · ·

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mm1sterium ur Ernahrung und Landwirtschaft

Group headquarter (listed company at the Frankfurt stock exchange) corporate branch 1: Agriculture Farm 1 Farm 2 Farm … Farm … Farms in Lithuania

Jungehülsing "Farmland Market Regulation" 3 Juni 2019 2

1. KTG AGRAR SE: organisation and growth through share deals

Farm … Farms in Romania Farm 88 Farm … Farm … Farm … Farm 89 national political objectives:

• widespread distribution of property
• No market-dominating position
• Preemption right for farmers
• speculation prevention
• Regional value addition

53.000 ha farmland (average seize: 600 ha)

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Foreign companies

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Group headquarter corporate branch 1: Agriculture

Foreign companies

Company 1 Company 2 Company 3 Company … Farm 1 Farm 2 Company 35 Company 3 in Russia Company 1 Farm … Farm … Farms in Lithuania

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1. KTG AGRAR SE: organisation and growth through share deals

corporate branch 2: Renewable Energy corporate branch 3: Food processing Farm … Farms in Romania Farm 88 Farm … Farm … Farm … Farm 89 Company … Company 2 Company … Company 13

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Group headquarter corporate branch 1: Agriculture Company 1 Company 2 Company 3 Company … Farm 1 Farm 2 Company 35 Company 3 in Russia Company 1 Farm … Farm … Farms in Lithuania

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1. KTG AGRAR SE: organisation and growth through share deals

corporate branch 2: Renewable Energy corporate branch 3: Food processing Farm … Farms in Romania Farm 88 Farm … Farm … Farm … Farm 89 Company … Company 2 Company … Company 13

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• foreign tinaniial investors tf\/ to take over

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9,03 % of 1<.1G r,.GRAR SE

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fidelidae conwanhia de seguros SA, Portugal

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controlled hi/ fosun international Urnited,

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• 100 million € stock market value eroded;
• debts of 400 million €;
• 800 jobs at risk;
• Individual agricultural holdings (subsidiaries)

insolvent:

• Farmland under ownership was sold to pay off

the group’s debt.

• The EU agricultural payments were pledged to

the banks for years to come;

Jungehülsing "Farmland Market Regulation" 3 Juni 2019

2. KTG AGRAR SE: insolvency 2016

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Group headquarter corporate branch 1: Agriculture Company 1 Company 2 Company 3 Company … Farm 1 Farm 2 Company 35 Company 3 in Russia Company 1 Farm … Farm … Farms in Lithuania

Jungehülsing "Farmland Market Regulation" 3 Juni 2019 6

corporate branch 2: Renewable Energy corporate branch 3: Food processing Farm … Farms in Romania Farm 88 Farm … Farm … Farm … Farm 89 Company … Company 2 Company … Company 13

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KTG AGRAR SE: insolvency 2016

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Group headquarter corporate branch 1: Agriculture Company 1 Company 2 Company 3 Company … Farm 1 Farm 2 Company 31 Farm … Farm …

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corporate branch 2: Renewable Energy Farm … Farm … Farm … Farm … Farm … Farm 36 Company … Foreign financial Investor

3. Purchase of KTG AGRAR SE by the Gustav-Zech-Foundation

private owner

Foreign companies

agricutturat objectives?

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• No local I Young farmers were able to buy

land.

• 36 farms With an area of

20,0oo hectares

Were acquired by the next financial investor.

• speculation could not be controlled.
• The regional value added flows to the Group

· headquarters abroad.

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Deutsche Agra Holding

groups like KTG AGRAR do not exist in the:

• EU farmstructure survey;
• Farm Accountancy Data

Network (FADN)

• EU-database for agricultural

payments;

Land concentration ?

4. Is KTG AGRAR SE an isolated case?

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Land concentration ? … 111 agricultural enterprises or

4. Is KTG AGRAR SE an isolated case?

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8.000 hectare 20.000 hectare 22.000 hectare 4.000 hectare 20.600 hectare

4. Is KTG AGRAR SE an isolated case?

Land concentration ? … 111 agricultural enterprises or … 5 Groups, 111 subsidiaries!

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Study „Supraregional Capital investors“

• In 2017 34 % of the farms and 25 % of

the farmland belongs to investors;

• The agricultural land owned by investors

has increased by 42%.

• Share deals: 18 % of agicultural land

sales, in some years up to 51 %.

Jungehülsing "Farmland Market Regulation" 3 Juni 2019

853 compan ies 709.000 ha (56% -

LF) TI-Report 52, A. Tietz, Braunschweig, 2017. 11

• bserva

tion: 11 years

4. Is KTG AGRAR SE an isolated case?

• The extent of soil concentration is

underestimated by the authorities.

• Share deals with agricultural land are

increasing.

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4. Is KTG AGRAR SE an isolated case?

Thank you for your attention! www.bmel.de