ITALY/GERMANY: Barilla puts Lieken on the block
By Katy Askew | 19 June 2012
- Barilla puts Lieken up for sale
- Freeing up cash for investment in core
Italian food group Barilla has put German baking business, Lieken, up for sale.
In its latest set of results for fiscal 2011 Barilla said that while its bottom line improved thanks to lower one-off charges, margins have come under pressure from rising input costs. The top line is also feeling the impact of wider economic issues that have meant Barilla has been loathe to pass these higher costs along to consumers, as pricing action would surely hit volumes.
In this context, it should perhaps come as little surprise that the firm has chosen to shed this non-core business in order to "free up resources" to "continue to invest" in its core businesses, including its number one pasta brands in Italy and the US.
The disposal also comes at a time when the European baking sector is entering a period of consolidation, as evidenced by Dutch ingredients and baking group CSM's move to sell-off its baking interests last month. In order to lead this process, companies will need to invest heavily in their baking operations - something that Barilla is clearly unwilling to do.
Barilla Holding SpA announces the intention to divest Lieken AG to focus investment
on its core business
Parma, June 19th 2012 - As part of a review of strategic options for the future of Lieken AG, Barilla has begun a search process for interested parties from which to choose a potential new shareholder for Lieken AG. The move would allow Barilla to find a dedicated long-term partner for Lieken and help it achieve its strategic goals. At the same time, it would free up resources for Barilla to continue to invest in its core business after posting strong economic results in 2011.
Original source: http://barillagroup.com/corporate/en/home/media/news/company-news/120619-Barilla-announces-intention-divest-Lieken.html
Sectors: Bakery, Mergers & acquisitions
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