Mondelez International has struck a deal to take an 80% stake in Vietnamese food group Kinh Do Corp.’s snack business for VND7.846trn (US$370m).
The deal, which remains subject to the approval of Kinh Do shareholders, represents a “landmark” move for Mondelez in Vietnam, the US company indicated.
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Mondelez intends to leverage Kinh Do’s “manufacturing capabilities”, “comprehensive distribution network” and routes to market to grow its presence in Vietnam.
Mondelez also hopes to build on Kinh Do’s brand strength in the region, the company indicated. The Vietnamese group’s brands include Kinh Do mooncakes and biscuits, Cosy biscuits, Solite soft cakes and AFC crackers. Mondelez already sells its own brands, such as Oreo cookies, Ritz crackers and Cadbury chocolates, in the Asia Pacific region.
For its part, Kinh Do said the deal would enable it to “bring Kinh Do to the next level” in Vietnam and “around the world”.
Kinh Do is currently in the process of restructuring its business to consolidate its snacks division – excluding Kido ice cream, dairy and retail bakery – into a single business entity, which will be called BKD. The company has been working to reduce costs and improve efficiency, a drive that resulted in a 31% increase in second quarter profits, according to its most recent financial update.
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By GlobalDataFollowing the transaction, Kinh Do would continue to operate its other food interests which span dairy and packaged meals categories.
Kinh Do shareholders will vote on the proposal at an EGM in December. Under the terms of the proposed transaction, Mondelez has the opportunity to acquire – and Kinh Do has the opportunity to sell – the remaining BKD shares after 12 months from the date of completion.
The agreement is expected to close in the second quarter of 2015, the companies said.
