Food and beverage sector mergers and acquisitions comment – February 2008

Date

February saw the lowest number of transactions in the food and beverage sector for several years and represents a steep decline from just last month when we reported 11 completed deals. Is this just a blip or does it represent the beginning of a longer term trend reflecting the current worries over credit in the financial markets?

One potential trend which is being forecast is the resurgence of trade buyers in a sector which has been dominated for the past few years by private equity groups acquiring businesses. It will be interesting to watch the relative numbers of deals completed by trade and financial purchasers as we move further into 2008.

Deals completed in the UK

Hero AG, the Swiss producer of branded healthy food and infant nutrition products, has acquired Organix Brands Ltd, the UK producer of organic foods for babies and children. Financial details of the acquisition were not disclosed.

Huegli, the listed Swiss foods group, has acquired Contract Foods, a privately-owned UK supplier of dry foods to the food and beverage industry. Terms of the deal were not disclosed.

Unilever has acquired Inmarko, the Russian ice-cream company with annual sales of £86m. Terms of the deal were not disclosed. Completion is subject to regulatory approval and is expected to occur in the first half of 2008.

Central Foods, the frozen food supplier to wholesalers and caterers, has undergone a management buy-out backed by Royal Bank of Scotland. Financial details have not been disclosed.

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