Orkla has agreed to buy Czech processed food producer Hame in a deal that will give it a stronger foothold in Central Europe, the Norwegian food group said on December 11.

Orkla is buying Hame, one of the Czech Republic’s leading food companies, from Luxembourg-based private equity holding company Decapterus for €175mn on a debt-free basis. The purchase price will be funded through Orkla's existing credit facilities.

The acquisition will help Orkla double its turnover in Central Europe, where it already owns Vitana - a processed food producer on the Czech and Slovak markets - Felix in  Austria and Orkla Foods Romania.

“With this transaction Orkla becomes one of the leading FMCG players in attractive markets in Central Europe,” CEO Peter Ruzicka said in a statement on the company’s website.

Hame, headquartered in the southeastern town of Kunovice, employs nearly 2,400 and has ten production plants. It closed 2014 with gross sales of CZK4.9bn (€181mn) and a net profit of CZK234mn.

Orkla is a leading supplier of branded consumer goods and concept solutions to the grocery, out-of-home and bakery markets in the Nordics, the Baltics and selected markets in Central Europe and India. Orkla, which is listed on the Oslo Stock Exchange, had a turnover of NOK30bn (€3.1bn) in 2014.

Reports in the Czech media earlier this year suggested that other potential bidders for Hame included a fund controlled by Czech billionaire Finance Minister Andrej Babis and China’s CEFC.