Ljubljana/Zagreb, 24 May (STA) - The Slovenian privately-held electronics group Iskra has signed an acquisition agreement with Croatian electric cable manufacturer Elka. The value of the deal has not been disclosed.
The contract on the acquisition of one of the largest factories of electric cables in this part of Europe was signed on Saturday by Iskra owner and CEO Dušan Šešok and the owner of the Elka-Cotra group, Miljenko Hacek. The transaction will be completed pending approval from the competition watchdogs in both countries.
According to the newspaper Delo, Iskra hopes to reap the benefits of forthcoming investments in long neglected electricity networks, rail renovation and construction, future investments in telecommunications, and efforts to reduce Europe's dependence on manufacturing in Asia.
The Zagreb-based Elka employs 285 people, producing high-voltage cables and fibre optic cables for roads, tunnels, railways and telecommunication systems in Croatia, Slovenia and Bosnia-Herzegovina.
"The number one market is of course Germany, but Croatia, Slovenia and other nearby countries are also important. These cables are not transported far. Our most distant market is the UK and we will not change that," Šešok told Delo after signing the takeover contract.
This is Iskra's second major investment in Croatia after the takeover of the NCP shipyard in the coastal town of Šibenik for almost EUR 5m at the start of 2019.
The shipyard, now called Iskra Shipyard, repairs Croatian navy vessels and produces ships for Norwegian fishermen. Its annual revenue tops EUR 20 million, according to Delo.
Šešok expects Elka to generate around EUR 70 million in revenue this year. He sees a lot of growth potential for both companies and synergies.
"We see great potential in the production of underwater electric cables on the location of the shipyard in Šibenik," he said, noting that the electric grid to the Croatian islands was 50 years old or more and would need to be modernised. "If we make the cables in Šibenik, all we have to do is load them on a ship and take to an island," Šešok told Delo.
Iskra with its two Croatian subsidiaries expects to post around EUR 200 million in revenue this year and is aiming for EUR 300 million in the near future.