Reading the M&A runes is hardly an exact science but, let’s face it, it’s fascinating (and, for some, is a lucrative profession) – and there’s no question last week’s deal between Mondelez International and Lotus Bakeries has got industry watchers wondering what might come next.

On Wednesday (13 June), the snack makers announced a new, multi-faceted partnership that takes in manufacturing, distribution and new product development.

The question is: might the tie-up set the stage for a bigger deal between the companies at some point in the future?

The transaction announced last week will see US giant Mondelez manufacture, market and sell Biscoff biscuits in India from its existing production and distribution network in the country, where Cadbury dominates the local chocolate market.

Under the terms of the deal, the two companies will also develop new products combining Biscoff biscuits with Mondelez chocolate brands such as Cadbury and Milka. They will first be sold in Europe, starting in 2025, with an option to expand the product offering globally.

In a joint statement, both companies’ CEOs spoke glowingly about the transaction and (to be clear) made no comment at all about the prospect of any subsequent deals down the road.

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Lotus Bakeries CEO Jan Boone highlighted Mondelez’s “commercial expertise” and presence in India and added: “We believe now is the right time to expand our distribution in this growing market.”

His counterpart at Mondelez, Dirk Van de Put, said: “This partnership will help accelerate our strategic focus on the cookies category by introducing a premium brand that is widely loved in numerous markets to a much wider audience.”

It’s Van de Put’s comments about the Biscoff brand in particular that will likely cause some to wonder if perhaps, one day, an altogether different transaction might occur.

Last year, the Lotus Biscoff brand (which takes in spreads but is centred on caramelised biscuits) accounted for more than half of Belgium-based Lotus Bakeries’ sales revenue of €1.06bn ($1.14bn).

According to the company’s published figures, the brand enjoyed a CAGR of 16% from 2013 to 2023.

Lotus Bakeries is by no means a single-brand business, with a portfolio, built through M&A, of products including the snack brands Nakd, Trek and Bear, plus Kiddylicious baby food and Peter’s Yard sourdough crackers.

However, Biscoff is the engine behind the group, which, as a whole, has also enjoyed a solid run of growth in the last decade. From 2013 to 2023, the company’s CAGR was 12%, helped by its run of acquisitions and bolstered by Biscoff.

A look at the make-up of Biscoff’s sales demonstrates how the brand remains centred on a handful of key markets, with the UK accounting for 24% of sales last year. Biscoff’s top five markets account for almost three-quarters of the brand’s annual sales. Optimists would argue the brand still has plenty of opportunities to go after.

Mondelez has proven acquisitive in recent years, snapping up businesses including US snack-bar brand Clif, Mexican confectioner Ricolino and, notably, Greece-based Chipita, which, similarly, was a company with a brand – 7 Days – with a growing international presence.

Biscoff’s weighting to biscuits, its success so far in building solid positions in a clutch of key markets and the potential to replicate some of that success in new territories could be attractions to Mondelez. The positioning of the Biscoff brand is sufficiently different from Oreo, Mondelez’s flagship biscuit brand, to not lead to any real overlap.

However, even if Mondelez was interested in one day making a move to buy Lotus Bakeries outright, the Belgian business’ ownership and its recent growth could present hurdles.

Lotus Bakeries was set up in 1932 by Jan Boone Sr., whose grandson (also named Jan Boone) is the company’s current chief executive.

In 1974, the older Boone partnered with the Stevens family and Lotus merged with a company called Corona. Both families remain the majority shareholders in the publicly listed business as part of the Stichting Administratiekantoor van Aandelen Lotus Bakeries, or STAK.

And a glance at the growth of the Lotus Bakeries share price indicates a move for the business would be pricey. In the last five years, Lotus Bakeries' shares have jumped in value by more than 300%, giving the business a market cap of €8.18bn.

“We think Mondelez will continue scouring the landscape to expand its reach by adding brands and businesses in untapped categories and/or geographies from time to time, although we don’t believe it has much of an appetite for a transformational deal,” Erin Lash, director for consumer equity research at US financial-services group Morningstar, says.

“We believe the opportunity to expand its footprint into untapped markets – such as Indonesia and Germany – or into other adjacent snacking categories, like health and wellness, could be in the cards.”

On the other side of the Atlantic, Robert Lawson, the managing partner of European consultancy Food Strategy Associates, acknowledges the two principal factors that could stymie the prospect of any takeover – Lotus’ ownership structure and its current valuation – but wonders if the tie-up announced last week could amount to something broader.

“It’s not unheard of for [Mondelez] to license brands but it’s not their go-to strategy,” Lawson says. “They’ve chosen to do this for – on the face of it – a competing biscuit product. There’s nothing in their portfolio which I would think they would view as competing directly and therein lies the question: is this a first route to see if they get on well together and an eventual acquisition?

“Remember that Lotus is 50% publicly owned and 50% family-owned. If the family wants to exit, then Mondelez is obviously the buyer of choice if they’re willing to pay, so this is perhaps dipping a toe in the water to see whether there’s a deeper relationship to be had but I have no basis to say that that is what this is about and it’s not going to be a cheap transaction.”

For now, of course, it’s just chatter. Speaking to the Financial Times earlier this year, Boone said: “We have now found the size where we can grow independently, so we don’t need a merger.”

But the tie-up with Mondelez has sparked talk among market analysts about what could happen next for a business and a brand that has been one of the food industry’s stand-out growth stories in recent years.