Irish food and agribusiness group IAWS is to merge with Switzerland’s Hiestand Holding to create a EUR2.7bn (US$4.3bn) baked goods company, ARYZTA.

In 2007, IAWS and Hiestand had combined annual sales of EUR2.3bn, EBITA of EUR213m and net income of EUR145m.

The newly created company, which will be listed on the Irish and Swiss stock exchanges, will have 23 production sites in 15 countries.

Commenting on the deal, IAWS chief executive Owen Killian emphasised the enhanced global reach of the new company.

“The proposed transaction will create a global food business focused on niche segments of the value added bakery and convenience food market,” he said today (9 June). “Aryzta will have geographical reach extending from North America through Eastern and Western Europe to south-east Asia and Australia.”

IAWS shareholders will hold an 83.3% stake in Aryzta, 8.7% will be held by free-float shareholders in Hiestand and private equity firm Lion Capital will take an 8% stake.

Under the deal, IAWS will acquire Lion’s 32% Hiestand stake for 12.7m IAWS shares and EUR30m cash.

Subsequently, for every two IAWS shares, shareholders will receive one Aryzta share.

It is expected that the transaction will be completed in the third quarter of the year, after regulatory and shareholder approval has been granted.