Kellogg buys Egyptian cereal maker Mass Food Group
Deal for Temmy's owner Mass Food Group is Kellogg's third inorganic transaction in Africa this year
Kellogg today (28 September) announced its second deal in Africa in a fortnight, buying Egyptian cereal business Mass Food Group for around US$50m.
The deal comes 12 days after Kellogg outlined plans for a joint venture in west Africa with Singapore-based Tolaram Group. At the start of the year, Kellogg snapped up a majority stake in Egyptian biscuit maker Bisco Misr.
Kellogg described Mass as "Egypt's leading cereal company". The Special K maker said Mass, founded in 1996, was the "first company to introduce breakfast cereal to Egyptian consumers". Annual sales stand at US$18m. Brands include Temmy's cereals and NutriFit cereal bars. Mass also exports foods to more than 30 markets, including in elsewhere in Africa, Europe and east Asia.
Chris Hood, president of Kellogg's European operations, described Mass as "an excellent strategic fit" for the business. "The combination of Mass Food Group's manufacturing capabilities, established local brands, and sales and distribution infrastructure, coupled with Kellogg's product innovation, international sales knowledge, iconic brands and marketing expertise, will help unlock the growth potential of the cereal category in the key markets of Egypt and north Africa," Hood said.
Tamer El Bahay, Mass' vice president, said the business was "proud" to have been acquired by Kellogg. "With their know-how and expertise, we can emerge stronger together with a combined portfolio of brands to excite our consumers."
Kellogg is financing the transaction with cash on hand. The transaction is not expected to have a material impact on the US group's annual operating profit and net earnings in 2015, it said.
Click here for an analysis of Kellogg's venture with Tolaram, through which the US giant is targeting cereal and snack markets in west Africa.
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