Kernel flagged ambitions for further takeovers in Russian after the Ukrainian silos-to-sunflowers group fulfilled a long-held quest for an acquisition in the country with purchase of Russian Oils.

Andrey Verevskyy, the Kernel chairman, said that while the size of the Russian Oils takeover was, at E60m, "relatively small", it was an "important new development" for the group in providing a foothold in Russia.

"It offers the company a long-term opportunity to diversify geographically and to capitalise on the sizable sunflower seed harvest typically produced by Russia," Mr Verevskyy said.

 "Clearly, we see this acquisition as our first steps in Russia, providing us a platform to build up expertise in this new and promising market.

"With this first acquisition abroad, we look forward to expand further our operations in Russia and replicate the business model we have successfully developed in Ukraine."

Long-held quest

The deal comes more than a year after Kernel flagged its quest for Russian takeovers, an ambition restated in March when it unveiled a $135m capital raise to create an acquisition warchest.

The group said then that it had already been outbid to one Russian oilseed crusher, but was considering "several" further targets.

Mr Verevskyy also highlighted the timing of the Russian Oils takeover, which is expected to close next month - in time to enable the group to exploit what is expected to be a "sizeable" Russian sunflower crop this year.

The country will produce 8.3m tonnes of sunflower seed, overtaking the European Union and Ukraine to become the world's top producer of the oilseed, according to US Department of Agriculture estimates.

Market reaction 

The deal, which will give Kernel an extra 400,000 tonnes a year in oilseeds processing capacity, has already been approved by Russian antitrust officials.

Kernel noted, but did not detail "other conditions" which need to be met before it can close its purchase of Russian Oils, which is expected to contribute E20m in earnings before interest, tax, depreciation and amortisation in 2012.

Kernel shares eased 1.3% to 59.20 zloty in morning deals in Warsaw.