Swedish confectionery companies Cloetta and Leaf International today (16 December) announced plans to merge.
The combined company will own brands including Chewits, Kexchoklad, Sperlari and Sportlife and will have net sales of SEK5.7bn (US$821.6m) and recurring EBITA of SEK666m, the confectioners said.
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It will operate under the Cloetta name and become a “leading Swedish confectionery company with a strong base in the Nordic region as well as in Italy and the Netherlands”, they added.
Leaf CEO Bengt Baron, who will become chief executive of the combined company, said: “This merger is a perfect match where we will unite iconic, local brands, from complementary categories with very few overlaps. The new Cloetta will offer a full range of strong brands, and a very strong route to market in the Nordic countries as well as in Italy and in the Netherlands. In an industry where the brand is nearly as important as the taste of the product, this transaction makes both industrial and strategic sense.”
The transaction, which values Leaf at SEK6.8bn, will be financed through a rights issue, an issue in kind to Leaf’s shareholders and bank financing. Investors in Cloetta shareholders will hold 42.4% of the combined company. Leaf’s shareholders, the private-equity groups CVC and Nordic Capital, will hold the remaining 57.6%.
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Cloetta shareholders representing 64% of the share capital and 81% of the votes in the company have stated their support for the transaction. Its main shareholder, Malfors Promotor, which owns over 52% of the business, plans to invest SEK545m in the transaction.
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By GlobalDataCloetta’s board said the deal offered “significant value creation potential” for the company’s shareholders and claimed the merger is expected to be accretive to earnings per share.
“Together with Leaf, we now place ourselves in a bigger context and can together build an even stronger company,” Cloetta chairman Olof Svenfelt said.
The deal remain subject to competition clearance and approval from Cloetta’s shareholders. The company will hold a shareholder meeting in February.
