European competition authorities yesterday (28 August) gave the go-ahead to Kraft’s proposed EUR840m (US$1.076bn) purchase of United Biscuit’s Iberian units. The move is set to considerably strengthen the US food group’s presence in Spain and Portugal.
The European Commission said that it did not anticipate any antitrust issues and had not received any complaints from rival food manufacturers.
The deal, which was inked in July, sees Kraft acquire UB brands in Spain and Portugal along with seven production plants in the region. Kraft will also regain the rights to all Nabisco trademarks – including Oreo and Ritz – in the EU, Middle East, Eastern Europe and Africa.
The deal is being financed through $548m in debt and the $522m stake that the company held in UB. It is expected to be accreditive in its first year, the company said, suggesting that it will boost EPS by two cents. It comes amid market speculation that Kraft’s parent company Altria is preparing to shed its majority stake in the world’s second largest food company.