OREANDA-NEWS. October 01, 2010. One of Estonia's largest bakeries, Eesti Pagar, has acquired a holding in the third-largest Latvian bakery Dinella in order to expand operations.

Eesti Pagar manager Veikko Vaarja said Dinella is a successful company with a strong market position that forms a good basis for expansion.

"Dinella has an around 20 percent market share in Latvia at present, but basing on Eesti Pagar's experience and know-how of both product development and marketing we shall surely be able to expand its activity," he explained. "A significant factor that led to the deal was also that we have both in Estonia and in Latvia two competitors of Finnish origin in common, and cooperation within the group will now make competing with them easier."

Dinella's new strategy will be finished in the coming months after which also the company's more detailed plans for the future will be made public. The parties have agreed not to disclose the price of the deal.

The Latvian company produced last year 12 million kilograms of bakery products. Its sales totaled 201 million kroons (EUR 12.84 mln). Dinella employs 460 people.

Eesti Pagar whose output last year totaled 16 million kilograms controls a third of the domestic market. Its sales amounted to 352 million kroons in 2009.

The Estonian-equity company says it is at present the second-largest bakery in Estonia. Based in the central Estonian town of Paide, Eesti Pagar employs more than 200 people.