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August 12, 2016updated 10 Apr 2021 5:41pm

Mondelez to buy Burton’s Biscuit Co. Cadbury biscuit licence

Mondelez International said today (12 August) it had agreed terms to buy the licence to manufacture, market and sell Cadbury-branded biscuits around the world from UK-based Burton's Biscuit Co.

Mondelez International said today (12 August) it had agreed terms to buy the licence to manufacture, market and sell Cadbury-branded biscuits around the world from UK-based Burton’s Biscuit Co.

The US snacks giant said the firms will not be disclosing the financial terms of the deal for the licence, which it said includes the UK, France, Ireland, North America and Saudi Arabia, subject to regulatory approval.

The announcement follows market speculation last month a deal was in the offing, although Burton’s majority owner, the Ontario Teachers’ Pension Plan (OTPP), had refused to comment. Reports in the UK media two weeks ago claimed Mondelez was looking to attain the biscuit licence for Cadbury in a deal said to worth up to GBP200m (US$263m).

Mondelez Europe executive vice-president and president Hubert Weber said today: “Ownership of the Cadbury biscuits licence offers us exciting opportunities to accelerate global growth and innovation, as we expand our leading position in biscuits, globally and in Europe.”

Weber said the deal “will help us to unify and expand our global Cadbury biscuits portfolio in key markets and enable us to explore delicious new products by using the best of our chocolate and biscuit innovation platforms”.

Mondelez and Burton’s have agreed Cadbury-branded biscuits will continue to be manufactured in the UK group’s factories by their employees under a co-manufacturing agreement. 

When OTPP took control of Burton’s in 2013, the group signalled its willingness to expand the UK biscuit maker via M&A. The firm missed out on acquiring United Biscuits last year, when the UK’s largest biscuit maker was sold to Turkey’s Yildiz Holding. 

Burton’s said in March 2015 it was looking to accelerate its growth in the US, where the company hoped to generate US$100m in sales in the “medium term”. The company said then that growth in the market would be driven by Cadbury-branded biscuits.

Last month, Mondelez revised its forecast for how much the US snacks giant’s revenues would grow on an organic basis in 2016. The Oreo and Cadbury owner said it believed its organic net revenue, which excludes factors like M&A and exchange rates, would grow by approximately 2% this year. In May, the company had set out an estimate for growth of “at least 2%”.

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