Mondelez international is reportedly consider making a bid for South African food and beverage company AVI.
Bloomberg, quoting unnamed sources, said discussions are underway for a deal that would increase Mondelez’s presence in South Africa.
Just Food asked Mondelez and AVI for their response to the story. Neither company wished to comment.
Johannesburg-based AVI is a publicly-listed consumer goods group with interests that also take in personal care and fashion. Its food brands are mainly centred around snacks with brands such as Provita crispbread, Flanagan’s crisps and Willards’ cheese curls. It also has a frozen food offering under the I&J brand.
In the year to 30 June 2021, it recorded revenue of ZAR13.26bn (US$843.5m), an increase year-on-year of 0.5%.
Mondelez already has a presence in South Africa where it sells local products such as Chappies bubble gum and chocolate bar Chomp as well as global brands such as Oreo biscuits and Cadbury Dairy Milk chocolate.
Bloomberg’s source said Mondelez may not want to acquire all of AVI’s assets as the non-food brands are not a natural fit with its existing portfolio.
Mondelez’s US peer PepsiCo extended its presence in South Africa in 2020 by buying Pioneer Foods Group for around $1.8bn.
The weight of Mondelez’s M&A activity since its formation in 2012 has focused on North America and Europe.
Mondelez’s presence in emerging markets was central to the investment case in the business when it was spun off from the old Kraft Foods Inc. nine years ago.
In the nine months to the end of September, the company’s net revenue from emerging markets stood at $7.44bn, up 12.3% on a year earlier. Group net revenue was 9.2% higher at $21.06bn.
Mondelez does not break down revenues for Africa but has stated that, in the opening nine months of 2021, net revenue from its Asia, Middle East & Africa reporting unit grew 14.7% to $4.83bn. The company did disclose it had seen “high-single-digit” growth in Africa during the third quarter.
CFO Luca Zaramella said earlier this month: “Our emerging markets results include double-digit growth in Brazil, Mexico, and India, as well as high single-digit growth in China, Russia, and Africa. These markets are attractive growth engines for us.”