"The high level of cash on corporate balance sheets is enabling companies to move quickly when presented with the right opportunity." David Murray, Global Consumer Products Transactions Leader
The top 10 deals in the first quarter of 2012 had a combined value of US$6.4b, representing 86% of the total disclosed deal value for the period.
Of the top 10, five deals were in the food sector, three in beverage and the remaining two in household and personal care. There were no mega deals and only two deals had a value greater than US$1b.
Top 10 deals in Q1 12
|Buyer Name ||Buyer country ||Seller name ||Seller country ||Disclosed Value* |
|Announced ||Deal type ||Sector ||CB or IB |
|Kellogg Co ||United States ||Procter & Gamble Co-Pringles ||United States ||$2,695 ||2/15/2012 ||Corporate ||Food ||In-Border |
|Carlsberg A/S ||Denmark ||Baltika ||Russian Fed ||$1,220 ||2/20/2012 ||Corporate ||Beverages ||Cross-border |
|Embotelladora Andina SA ||Chile ||Embotelladoras Coca-Cola Polar ||Chile ||$805 ||2/2/2012 ||Corporate ||Beverages ||In-Border |
|Royal Friesland Campina NV ||Netherlands ||Alaska Milk Corp ||Philippines ||$458 ||3/9/2012 ||Corporate ||Food ||Cross Border |
|Theo Müller ||Germany ||Robert Wiseman Dairies PLC ||United Kingdom ||$422 ||1/13/2012 ||Corporate ||Food ||Cross-border |
|Svenska Cellulosa AB ||Sweden ||Everbeauty Corp ||Taiwan ||$290 ||2/25/2012 ||Corporate ||HPC ||Cross Border |
|Olam International Ltd ||Singapore ||Titanium Holding Co SA ||Nigeria ||$167 ||2/9/2012 ||Corporate ||Food ||Cross-border |
|Anadolu Efes Biracilik ve Malt ||Turkey ||Al Waha ||Iraq ||$134 ||2/3/2012 ||Corporate ||Beverages ||Cross-border |
|Nisshin Seifun Group Inc ||Japan ||Miller Milling Co ||United States ||$122 ||2/27/2012 ||Corporate ||Food ||Cross-border |
|LG Household & Health Care Ltd ||South Korea ||Ginza Stefany Cosmetics Co Ltd ||Japan ||$$118 ||1/26/2012 ||Corporate ||HPC ||Cross-border |
Source: EY's Analysis of Thomson Reuters Data
*The disclosed value is the total value of consideration paid by the acquiror, excluding fees and expenses. The dollar value includes the amount paid for all common stock, common stock equivalents, preferred stock, debt, options, assets, warrants, and stake purchases made within six months of the announcement date of the transaction. Liabilities assumed are included in the value if they are publicly disclosed. Preferred stock is only included if it is being acquired as part of a 100% acquisition. If a portion of the consideration paid by the acquiror is common stock, the stock is valued using the closing price on the last full trading day prior to the announcement of the terms of the stock swap. If the exchange ratio of shares offered changes, the stock is valued based on its closing price on the last full trading date prior to the date of the exchange ratio change. For public target 100% acquisitions, the number of shares at date of announcement is used.
Kellogg hungry for international expansion
The quarter’s largest deal was Kellogg’s agreement to purchase Procter & Gamble’s Pringles potato chip business for US$2.7b in cash after the proposed sale of Pringles to Diamond Foods in a debt and stock-based deal worth US$2.35b.
Top 10 deals in Q1 12
Carlsberg tightens its grip in Russia
In February, Carlsberg announced plans to buy the remaining 15% minority stake in its Russian division Baltika for US$1.2b through a voluntary cash offer. Carlsberg is the market leader in the Russian beer market, which accounts for about 40% of the Danish brewer’s revenues, but is facing challenging market conditions.
Further consolidation in Latin America soft drink bottling market
In a deal worth US$805m, Embotelladora Andina agreed to merge with soft drinks producer and distributor Embotelladoras Coca-Cola Polar, through an exchange of shares. The merger aims to consolidate Andina’s leading position in the Latin American bottling business with operations in Argentina, Chile, Paraguay and Brazil.
Dutch dairy group looks east
The Netherland’s Royal FrieslandCampina, the world’s fourth largest dairy company, announced plans to spend up to US$458m to buy the remaining shares in Alaska Milk Corp. FrieslandCampina has agreed to buy the stake of Alaska’s founding Uytengsu family for US$302.5 million, which will increase its holding in the Manila-listed company from 8.1% to 68.9%.
To fulfill local regulatory requirements, FrieslandCampina will tender for the remaining outstanding shares at the same price, which could cost up to a further US$155m.
Integration in the UK dairy sector
In January, Theo Müller, the privately owned German dairy group best known for its yogurts and creamed rice, announced the £279.5m (US$422m) cash takeover of Robert Wiseman Dairies, the UK’s biggest milk producer.
SCA’s portfolio transformation continues
At the end of February, Svenska Cellulosa AB agreed to purchase Everbeauty for US$290m on a debt-free basis. Everbeauty is a leading Asian personal care products company with sales in China, Taiwan and Southeast Asia. Within incontinence care products, the company holds a number two position in China and a number one position in Taiwan.
Olam expands downstream in West Africa
Further evidence of the vertical integration and emerging market expansion themes is Olam International’s announcement that it had acquired Titanium Holding Company for US$167m.
Anadolu/Coca-Cola expand in Iraqi soft drinks market
Turkish beverage group Anadolu Efes and Coca-Cola agreed to acquire an 85% interest in Iraq’s Al Waha for Soft Drinks Mineral Water & Juices LLC (Al Waha) for US$134m. Anadolu Efes is the largest shareholder of Coca-Cola İçecek conducting Coca-Cola operations both in Turkey and international markets. The stake in Al Waha has been purchased by Waha Beverages, a Netherlands-registered subsidiary of Coca-Cola İçecek, and in turn Coca-Cola has indirectly taken a 23.6% stake in the Dutch investment vehicle.
Nisshin Seifun leverages the strong yen
The first quarter provided further evidence of Japanese companies using the strength of the yen to help make acquisitions in overseas markets. In March Nisshin Seifun Group Inc., reached an agreement to acquire all the shares of Miller Milling Co., a US-based producer of durum and hard wheat flours for breads, buns, muffins and tortillas, for US$122m.
LG broadens its portfolio in Japan
South Korea’s LG Household & Healthcare in January announced the acquisition of Japan-based cosmetics company Ginza Stefany Cosmetics. Initially, LG will pay US$118m for a 70% stake in Ginza and purchase the remaining 30% within three years.
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