Blog: Continental consolidation
Dean Best | 29 June 2009
After months of speculation, news reached us on Friday (26 June) that struggling UK prepared meals company Uniq has entered into a binding agreement over the sale of its French business, Marie, to LDC.
Following regulatory and shareholder approval, LDC would acquire 100% of Marie in a deal worth EUR60m (US$84.5m). The French poultry group would also assume responsibility for Marie's net debt of EUR13m.
According to Investec analyst Nicola Mallard, the deal offers Uniq "a solid price" as "trading has not been easy in the French market". Indeed, in the first quarter Marie announced a 7.6% sales decline.
Uniq told just-food that proceeds from the sale would be used to pay down debt and address a pension deficit. The remainder would then be reinvested in Uniq’s other businesses.
While the market broadly expects Uniq to announce a further sale of its remaining continental interests, a spokesperson for the company insisted that a decision is yet to be made on the way forward for its units in northern Europe. According to Uniq, the possibility of further investment and the establishment of a joint venture still on the cards.
The agreement also sees LDC consolidate its position on the highly fragmented French ready meals market. Phillip Galin, MD of fresh meals at LDC, said that the acquisition would provide the company with a crucial foothold in the branded prepared foods sector.
“Five years ago we said we aimed to develop chilled brands but we didn't have a great brand. With Marie, it is for us a way to have such a position on the French market and develop categories of products," he told just-food.
Meanwhile, further consolidation in the French food sector could also be in the offing, with rumours abound that embattled dairy group Entremont Alliance has attracted the acquisitive eye of Lactalis, among others.
France’s food sector is made up of a patchwork of smaller players. As the current trading environment places increasing pressure on weaker companies, it seems we could well be in for a swathe of M&A news from across the channel in the months to come.
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