Blog: Dean BestSodiaal becomes big cheese in dairy with Entremont buy

Dean Best | 21 December 2010

One of the year's longest-running M&A stories has reached a conclusion with French dairy co-op Sodiaal finalising its plans to buy cheese maker Entremont Alliance.

A draft agreement on the deal was signed in June but, since then, Sodiaal, Entremont's sole shareholder, the holding company Unifem and the cheese maker's creditors have been in talks about its debts.

The debts, estimated in February at over EUR335m, were said to be the main sticking point preventing the deal being finalised but, on Friday, the French government, which was overseeing the talks, declared success.

Acquiring Entremont will make Sodiaal one of Europe's top five dairy processors and the deal highlights that the consolidation of the continent's dairy sector is gathering pace.

The deal is the biggest in European dairy since the 2008 merger between Friesland Foods and Campina. The financial crisis and economic downturn halted any further deals but this year there have been signs of a revival in activity - last week's announcement from Arla Foods that it plans to merge with Germany's Hansa-Milch being a prime example.

What's more, we are likely to see more M&A moves in Europe's dairy market next year as the end of EU dairy quotas in 2015 nears. Building scale will help protect businesses from a more deregulated market for milk.

Of course, 2011 will also be an important year for Sodiaal. The co-op is one of the two investors in yoghurt brand Yoplait and its partner, private-equity firm PAI Partners, is set to sell its stake.


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