The stand-out story this week centred on Mead Johnson, with the US infant formula maker in talks to sell the business to UK FMCG group Reckitt Benckiser. Elsewhere, European confectioner Cloetta said it was cautiously looking for M&A opportunities, UK firm Portlebay Popcorn was bought out of administration and Nestle moved its US head office to get closer to its customers.
“The parties are presently engaged in a period of due diligence and contract discussion” – UK FMCG group Reckitt Benckiser confirms it is in “advanced talks” with Mead Johnson to buy the US infant formula group.
Go deeper with GlobalData
Why Reckitt Benckiser has moved for Mead Johnson – analysis
“Cereal Partners [is] the most likely and logical buyer, but at a much-reduced valuation. It is, of course, possible that Goldman Sachs don’t get to a satisfactory price and Bright Foods decide to hang on. But I don’t see the valuation getting better any time soon” – Julian Wild, a partner at UK-based law firm Rollits, sees the fit between the Nestle-General Mills venture and breakfast cereal business Weetabix.
“This is a great investment for us, popcorn is a growing market and Portlebay is a great, premium product” – Tayto Group CEO Paul Allen explains why the UK crisp maker has bought local firm Portlebay Popcorn out of administration.
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“Westland Group has the capital investment, technical expertise, quality products and resources to recover from last year’s loss and get back to paying shareholders a competitive payout. But our current structure, including staff roles, is not set up in the best way to deliver the results we want to achieve” – Toni Brendish, the CEO of Westland Milk Products, explains why the New Zealand dairy cooperative is reviewing its levels of staff.
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By GlobalData“This is a rare combination of complementary businesses operating in truly adjacent categories” – Pacific Equity Partners managing director Tony Duthie on why the Australia-based private-equity firm – and owner of local business Pinnacle Bakery – has snapped up bakery products and flour manufacturer Allied Mills.
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“We have one person working on M&A in our team. There is no lack of work, the challenge is to find the right opportunities for us. There is a lot of consolidation in Europe, a lot of family-owned businesses… we just have to make sure they come to us at the right synergies, the right price. I think multiples are a little high [although] they have come down a little” – Cloetta interim president and CEO Danko Maras says the European confectioner is looking at M&A but in a watchful manner.
“With the food and beverage landscape continuing to transform at a rapid pace, Nestle has been innovating and making strategic changes to the business over the past five years. This move is the next step in our evolution. This location allows us to be closer to our business operations, our customers and other important stakeholders” – Paul Grimwood, chairman and CEO of Nestle’s US business, explains why the company is moving its US head office.
