ELCA Cosmetics Ltd (“ELCA”), is a joint venture created in 2001 for the sale and distribution of beauty products in Greece, Romania, Bulgaria and Cyprus (the “Territory”).ELCA is owned by Sarantis Group (the “Group”) which holds a 49% interest in the joint venture and The Estée Lauder Companies Inc. (“EL”) which holds the remaining 51% interest. ELCA is based in Cyprus and fully owns the subsidiary companies ESTEE LAUDER HELLAS S.A., ΕSTEE LAUDER BULGARIA EOOD and ESTEE LAUDER ROMANIA Srl., based in Greece, Bulgaria and Romania respectively.
The Group and EL have agreed to amend the Shareholders Agreement governing ELCA to extend the term of the arrangement from June 30, 2021 to June 30, 2028. The parties have also agreed to expand the Territory to include Moldova.
Based on the new agreement, EL will have the right to increase its interest in ELCA to 100% by purchasing shares held by the Group, including the right to increase its stake based on the financial statements of ELCA at June 30th 2021, June 30th 2024 and June 30th 2027 for the 9%, 25% and 15% respectively.
The Group’s strategy with respect to the aforementioned extension will be based on:
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Utilizing the liquidity that will be created during the period 2021-2027, in order to further support the Group’s investment plan. This involves acquisitions that satisfy the Group’s criteria and are able to provide synergies, contribute to profitability, as well as provide added value to the shareholders.
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Absorbing new distribution agreements, which will further strengthen the Group's product portfolio.
The aforementioned strategy is expected to compensate by at least 130% the potential loss from Joint Venture's profitability.
As always, the Group's Management remains committed to its strategic priorities for the future focusing on the development of new products, geographical expansion, increasing economies of scale, cost improvement and acquisitions with the ultimate goal to create added value for its shareholders.
Sarantis Group extends the Shareholding Agreement with the ESTĒE LAUDER COMPANIES INC.
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