SWITZ/SINGAPORE: Barry Callebaut buys Petra Foods' cocoa arm

By Dean Best | 12 December 2012

Deal will boost Barry Callebaut volumes in LatAm and Asia by 65%

Deal will boost Barry Callebaut volumes in LatAm and Asia by 65%

Barry Callebaut said today (12 December) it had become the world's largest cocoa processor after agreeing to buy Petra Foods' cocoa ingredients business for US$950m.

The Switzerland-based group, which supplies cocoa and chocolate products to some of the world's largest chocolate brand-owners, said the acquisition would help boost its presence in developing countries.

"A stronger integrated position in sustainable cocoa sourcing and processing is important to keep growing our chocolate business over-proportionally, especially in emerging markets," Barry Callebaut CEO Juergen Steinemann said.

The acquisition, which is expected to close next summer, will boost Barry Callebaut's sales volumes in Asia and Latin America by almost two-thirds. Those regions would now account for 31% of Barry Callebaut's two volumes, it added.

The deal includes seven plants in Asia and Europe and sales offices in Singapore, the Netherlands and the US.

EBITDA from Petra Foods' cocoa division fell 29% in the first nine months of the year on the back of a 20% slide in sales. Petra Foods blamed "weak" global chocolate consumption.

In 2011, sales and EBITDA increased amid "strong demand" and improved earnings from its operations in Europe. Cocoa ingredients accounted for 75% of Petra Foods' sales and over 50% of its EBITDA in 2011.

Petra Foods CEO John Chuang said the company "maintains a strong emotional attachment" to its cocoa division but said the sale would "unlock substantial value" for shareholders.

The company plans to focus on strengthening its branded consumer business in Asia.

Shares in Barry Callebaut were down 2.55% at CHF917 at 10:33 CET this morning.

Petra Foods' shares jumped 20.36% to S$3.31 at 17:04 local time.

Click here to read an update on how the company believes the acquisition will boost Barry Callebaut's growth, and here for comment from the company on the reasons it believes in the deal.

Expert analysis

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Sectors: Commodities & ingredients, Confectionery, Emerging markets, Mergers & acquisitions

Companies: Barry Callebaut, Petra Foods

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