Slideshow: First-quarter M.&A. highlights

by Monica Watrous
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KANSAS CITY — Merger and acquisition activity for the food and beverage industry during the first quarter of 2014 echoed themes from the previous year. While companies such as Nestle and Unilever continued to shed non-essential businesses, others remained focused on diversifying and expanding.

“M.&A. activity in the first quarter of 2014 was consistent with general expectations as confidence in the general economy and the consumer sector has grown,” said Matthew O’ Loughlin, a partner with Manatt, Phelps & Phillips, L.L.P., who counsels public and private companies, investors and private equity groups in the food and beverage industry. “Food and beverage deals continue to be key driver of activity in the consumer sector as companies jockey for position and focus on market share and profitability.”

In January, Tyson Foods added to its prepared foods portfolio with the purchase of Bosco’s Pizza Co., a maker of partially baked frozen pizza products.

“This is part of our company’s strategic plan to grow our domestic prepared foods business,” said Donnie King, Tyson Foods’ president of prepared foods, customer and consumer solutions. “Bosco’s will be a good addition to our diversified portfolio of quality food offerings.”

Post Holdings, Inc. continued its expansion in the active nutrition category with its February-announced acquisition of the PowerBar and Musashi brands and related worldwide assets from Nestle S.A. The deal marked yet another strategic divesture from Nestle, which has sold several underperforming brands in the past year. Similarly, Unilever P.L.C. continued its streak of shedding food brands with the February sale of its meat snacks business, including the European brands Bifi, Benelux and Peperami, to Jack Link’s Beef Jerky.

Jack Link’s said the acquisition positioned the company to expand its global footprint, a key trend during the quarter that motivated moves by Saputo, Chiquita, the Hain Celestial Group and Grupo Bimbo.

Saputo Inc., the largest dairy processor in Canada, in February won a lengthy bidding battle for Warrnambool Cheese and Butter Factory Co. Holdings Ltd., one of Australia’s largest milk processors.

In a similar move, Chiquita Brands International, Inc. expanded its presence in the global banana market with the March purchase of Dublin, Ireland-based Fyffes in an all-stock transaction valued at approximately $526 million. The new company, ChiquitaFyffes, will have an operating presence in more than 70 countries and a workforce of approximately 32,000 people.

The Hain Celestial Group, Inc. in January agreed to acquire Tilda Ltd., a 100% branded Basmati and specialty rice products company headquartered in Essex, United Kingdom, with infrastructure in the Middle East, India and Europe.

“What a big opportunity to take high-end products into India, where there (are) 1.3 billion people, a new baby born every 3 seconds,” said Irwin Simon, chairman, president and chief executive officer, during a Jan. 14 presentation at the Integrated Corporate Relations XChang Conference.

Global growth was a key driver in the decision by Grupo Bimbo, S.A.B. de C.V. to acquire all of the common shares of Canada Bread Company, Ltd. for C$72 ($65) per share, or approximately C$1,830 million ($1,663 million). With the acquisition, Grupo Bimbo would gain a major foothold in the Canadian market through Canada Bread’s portfolio of brands.

“Canada Bread brings a remarkable portfolio of market leading brands that complement our global business, as well as a track record of highly profitable performance,” said Daniel Servitje, chairman and chief executive officer of Grupo Bimbo. “This demonstrates strong operational know-how and a commitment of quality to their customers and consumers. These values and their institutional expertise will remain firmly in place, and we look forward to welcoming Canada Bread’s associates to the Grupo Bimbo family. Canada Bread will benefit from our focus, expertise and resources and we will endeavor to create new opportunities for Canada Bread’s people, customers and business partners.”

Click for a slideshow of merger and acquisition highlights in the first quarter.

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