Ferrero in Talks to Takeover Kelloggs

 

Shares in the US maker of Kellogg's Corn Flakes have soared after reports that chocolate giant Ferrero is close to buying the firm for about $3bn (£2.2bn). A takeover deal for WK Kellogg, which makes the Froot Loops and Rice Krispies breakfast cereals for the North American market, could come as soon as this week, the Wall Street Journal and Financial Times reported. The Italian owner of the Ferrero Rocher, Kinder and TicTac brands has been expanding in recent years, buying Nestle's confectionery business and several other food firms. WK Kellogg's shares surged by more than 56% in extended trading in New York on Wednesday after the reports. The deal could be worth double the firm's $1.5bn stock market value when ordinary trading ended. It would see Ferrero taking a dominant position in the US breakfast cereal market. Founded in 1946, the Italian firm is one of the biggest players in the chocolate market, with more than 30 brands sold globally. WK Kellogg has been struggling financially in recent years and has more than $500m of debt. In 2023, the US breakfast cereals operation was split off from its former parent company's international and snacks business, which was renamed Kellanova.

BBQ - What issues might occur following the takeover?

Kelloggs Takeover

Boots Takeover

Boots, a cornerstone of the UK's retail landscape, is poised for a significant transformation as Walgreens Boots Alliance (WBA) is being acquired by US private equity firm Sycamore Partners in a deal valued at roughly $10 billion. This privatisation move comes as WBA grapples with evolving consumer behaviors, notably the surge in online retail, and increasing competitive pressures. The acquisition, with Sycamore Partners paying $11.45 per share, raises questions about the future of Boots' nearly 2,000 UK stores. Notably, WBA has faced a significant decline in market value, and this deal comes after previous restructuring efforts, including store closures. While Sycamore Partners has expressed commitment to WBA's brands, the potential for Boots to be spun off or sold separately remains a possibility, adding a layer of uncertainty to its future. The deal reflects the ongoing challenges in the retail pharmacy sector and the strategic shifts companies are making to adapt.

Boots Takeover

Carlsberg Britvic Takeover Approved

Carlsberg's £3.3bn deal to buy J2O maker Britvic has been approved by a High Court judge. The Danish brewery, which also owns brands including 1664 and Brooklyn, said it planned to create a single integrated drinks business called Carlsberg Britvic following the takeover. Britvic, based in Hemel Hempstead, Hertfordshire, employs about 4,500 people and also produces Robinsons squash and Tango. Andrew Thornton KC, for Britvic, said in written submissions that the company was "the largest supplier of branded still soft drinks and the number two supplier of carbonated soft drinks in Great Britain". Britvic holds an exclusive licence with US partner PepsiCo to make and sell brands such as Pepsi, 7up and Lipton Ice Tea in the UK, which Mr Thornton told the court would continue following the takeover. The hearing in London was told that the deal will see Britvic taken over by Carlsberg UK Holdings Limited, a wholly-owned subsidiary of Carlsberg A/S, which Mr Thornton described as "one of the world's largest international brewing groups" with a market capitalisation of 118bn Danish kroner (£13bn).

BBQ - What are the advantages for the consumer of this takeover?

Carlsberg Britvic

, externa

Carlsberg Buys Britvic

Carlsberg, the Danish brewer, has agreed to a £3.3bn deal to acquire Britvic, the maker of drinks such as Robinsons squash and J20. The takeover will result in a single beverage company, Carlsberg Britvic, aimed at expanding its business in the UK and western Europe. Despite a previous lower offer being rejected, the final deal will provide existing Britvic investors with £13.15 per share. The acquisition is expected to diversify Carlsberg’s portfolio and enhance its global partnership with PepsiCo. On the same day, Carlsberg also agreed to take control of its UK brewing joint venture with Marston’s for £206m. Russ Mould, investment director at AJ Bell, said Britvic would add "some diversification" to Carlsberg's portfolio. "The Danish outfit is having to react to a world in which younger age groups are less likely to indulge heavily in alcohol," he said. Britvic holds an exclusive licence with US firm PepsiCo to make and sell brands such as Pepsi, 7up and Lipton iced tea in the UK, and Carlsberg also has a bottling deal with the US company.

Blog Q: What are the potential benefits for Carlsberg in acquiring Britvic and taking control of its UK brewing joint venture with Marston’s?

Carlsberg Britvic