Blog: Petah MarianWill Morrisons look to swallow Iceland whole or look for scraps?

Petah Marian | 11 July 2011

There has been speculation that Morrisons, which has been tipped to be a major contender to acquire the Iceland Foods chain. However, reports have emerged over the weekend that the retailer might only consider taking on indivdual stores.

Morrisons CFO Richard Pennycook reportedly said last week that the UK retailer had benefited from acquiring stores sold following the acquisitions of Netto by Asda and Somerfield by The Co-operative Group.

However, the report in The Financial Times inferred that the success of these stores could mean that Morrisons, seen as a potential buyer for frozen-food retailer Iceland Foods, could instead only look take on some stores. And that conclusion could be misguided.

For Morrisons to even have scraps to access, it would require either Asda to buy the chain, and then triggering a Netto style sell-off for stores with overlapping catchment areas - and with Netto and Iceland's similar demographic pool, there would likely to be many.

Alternatively, a private-equity firm could snap up the chain and its constituent parts - although this would be unlikely as the location of many of the stores would be unlikely to fetch a premium and would also mean the loss of any equity that lingers in the Iceland brand.

And this is also before considering the desire of current chief executive Malcolm Walker to keep the chain in his hands. He founded the company and also has the option to match any offer - giving him a fairly strong position to take back control of the company - assuming he can finance the bid.

While Morrisons' senior management has emphasised over the past year its ambitions for growth, perhaps unless it looks at a full bid, it may struggle to feast on the winner's scraps.

 


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?