Finnish food group Raisio has announced the acquisition of the Benecol business in the UK, Ireland and Belgium from Johnson & Johnson in an EUR88.4m (US$110.8m) deal.
Until now, affiliates of Johnson & Johnson, Cilag GmbH International and McNeil PPC Inc, had the exclusive right to sell and market Benecol products in the UK, Ireland and Belgium.
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The US business is included in the deal, but McNeil will continue as Raisio’s licensee for the time being. The agreement allows for the return of the Benecol rights and transfer of certain US assets to Raisio or its possible new licensee at a later date.
For the first time since 1997, Raisio will have all the rights to the Benecol brand and plant stanol ester, the Benecol product ingredient, allowing Raisio to develop the business globally. The acquisition is estimated to increase Raisio’s EBIT by EUR9m annually the group said in a statement.
“The acquisition of the Benecol business in the UK, Ireland and Belgium as well as the amended agreement in the USA strongly support Raisio’s growth strategy with its branded business. In terms of Benecol products, Raisio’s long-term strategic goal is to enhance competitiveness in the existing markets, to expand into new markets as well as to innovate new products. Through this arrangement, we will have the opportunity to develop Benecol business on our own terms, following our strategic objectives,” said Raisio CEO Matti Rihko.
Earlier this week, Raisio launched the Benecol brand in Brazil.
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By GlobalDataRaisio also announced today it would write down the book value of suffering cereal brand Honey Monster by EUR10m.
“The UK’s breakfast cereal category is not growing and its profitability has declined. Sales and profitability of Honey Monster cereals are therefore also expected to remain permanently below the normal levels of recent years. In the last quarter of 2014, Raisio will write down the book value of the Honey Monster brand by EUR10m as part of the restructuring of activities related to the acquisition. The write-down has no cash effect.”
Last month, the product was rebranded to Honey Monster Puffs from Sugar Puffs and reformulated to contain 20% more honey and lower sugar content. The move was made in an attempt to boost sales by repositioning the cereal as a better product nutritionally.
