Blog: Dean BestKraft basks in biscuit bid

Dean Best | 4 July 2007

It’s Independence Day today (4 July) in the US – and, for certain top executives at Kraft Foods, it must feel like a well-deserved break after recent hard work.

Yesterday, the company announced it had tabled a bid to buy Groupe Danone’s biscuits and cereals business and Kraft CEO Irene Rosenfeld was in Paris, alongside her French counterpart Franck Riboud, to outline the offer.

Discussions on the offer between the two companies are yet to be finalised but yesterday’s hastily arranged press conference suggests the deal has been agreed in principle. A number of other potential obstacles also remain before Kraft and Danone can toast a deal – Danone must meet union representatives to persuade its workers of the merits of the offer, while the EU competition authorities may study the impact of the EUR5.3bn (US$7.2bn) deal.

Nevertheless, Kraft’ believes its bid to snap up Danone’s biscuits and cereals represents potentially good business for the US food giant. Kraft’s processed foods have lost favour with health-conscious consumers in the West. However, the company hopes that, by buying Danone’s biscuit business, it will have a larger presence in a still robust snack category and access to emerging markets, including China and Russia.

The deal looks to be decent business for Danone too. The French group’s biscuits division has failed to keep pace with the growth from its beverages and dairy operations. It is likely Danone will look to plough some of the sale proceeds back into those businesses and boost growth still further. Danone could be well-placed to make acquisitions of its own with Dutch nutrition group Royal Numico earmarked as a potential target by industry analysts. It will be intriguing to see which way that particular cookie crumbles.


BLOG

Barilla puts sustainability centre stage

Barilla's 2016 results statement, published last week, makes interesting reading, not because of the Italian food group's commercial performance, but for the emphasis placed on sustainability achievem...

BLOG

UK M&A deal volumes slide in early months of 2017

Fresh data from Grant Thornton indicates the number of mergers and acquisitions in the UK food and drink sector fell to the lowest level for over two years in the first quarter of in 2017 - but the ac...

BLOG

Food policy returns to focus in Westminster

Amid the political turmoil in the UK caused by the EU Referendum, the resignation of a Prime Minister, subsequent burning debates over the Brexit “divorce” settlement and now by the surprise announcem...

BLOG

Danone closes WhiteWave, who will acquire Stonyfield?

Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...

just-food homepage



Forgot your password?