Mondelez International, Inc. is plaaning to move deeper into the global baking business with a deal to buy Chipita SA, a rapidly evolving global baker of packaged cakes and pastries.
Based in Athens, Chipita witnessed sales of about $580 million in 2020. The company’s products include bagel, biscuits, cake bars, chips, croissants, and spreads sold mostly under the names of 7Days, Chipicao and Fineti brands. Chipita would expand the portfolio of Mondelez, a global giant in biscuits, crackers, chocolate and other confectionery products.
Dirk Van de Put, chairman and chief executive officer of Mondelez stated that Chipita falls squarely within the Mondelez strategy of growing in the global snacking business.
He further added- “Their iconic brands and significant scale across so many attractive geographies make them a strong strategic complement to our existing portfolio and future growth ambitions in Europe and beyond.”
Chipita’s products are manufactured in 13 manufacturing plants and are marketed in over 50 countries (including the United States), reaching 2 billion consumers.
“The acquisition will enable the Mondelez International business to offer a broad bakery portfolio — biscuits, cake and now pastry — meeting growing consumer demand for this segment,” Mondelez informed.
The company apprised that Chipita gives Mondelez a foothold in the “attractive $65 billion packaged cakes and pastry category, explaining the Chipita market segments as “priority adjacent snacking categories such as croissants and bake rolls.
In North America, Chipita since 2017 has been a part of CCP, a joint venture with Catamo and Alberto Romo of Proan, a leading food manufacturer in Mexico. The business delivers mini croissants under the Vuala brand in Mexico.
Mondelez mentioned that this acquisition will give the company a more robust presence in central and Eastern Europe, core markets of Chipita.
“Mondelez International will utilize Chipita SA’s Central and Eastern European distribution network capabilities to enhance its own distribution in the region and continue to bring the brands to new countries in the region and beyond. The deal will also offer innovation and co-branding opportunities by bringing Mondelez International’s iconic chocolate brands to new categories,” as per the officials of Mondelez.
While paying over three times of the annual sales for Chipita, Mondelez declared the transaction will be immediately accretive to earnings. Closing of the deal is liable to antitrust approvals. The acquisition will be funded by existing cash and new debt issuance. Chipita’s meat-processing business and Britchip, a joint venture in India is not a part of this deal.
Earlier in 2021, Mondelez bought Grenade, a leading UK performance nutrition company; Gourmet Food Holdings, a major Australian company in the premium biscuit and cracker category; and Hu, a US better-for-you snacking company.
Chipita seems to be a significantly more big acquisition (terms of the earlier transactions were however undisclosed), and less than a month ago, Mr. Van de Put cast doubt as to whether Mondelez would be making some other major acquisitions too anytime soon.
Mondelez Intl to Acquire Snack Company, Chipita S.A.
