The third quarter top 10 deals provided two examples of emerging market consumer products conglomerates making non-consumer product acquisitions.
The top 10 deals in the third quarter were dominated by the beverage sector, which accounted for seven of the 10 transactions, including the megadeal acquisition of Foster's by SABMiller.
Top 10 deals Q3 11
SABMiller swallows Foster's
The third quarter's largest transaction and its only megadeal was the purchase of Foster's by SABMiller in September for US$10.8b in cash. A takeover had been expected following Foster's demerger earlier this year of its loss-making wine business into a listed group, Treasury Wine Estates.
Kirin's Brazilian entry
Japan's Kirin Holdings announced that it had paid US$2.5b for Aleadri-Schinni Participações e Representações, which holds a 50.45% stake in Schincariol, the Brazilian beer and soft drinks producer. It was the second-largest deal in the quarter and illustrates the ongoing expansion into faster-growing emerging markets by developed world beverage companies.
Asahi builds out its Asian network
Japan's Asahi Group Holdings agreed in August to buy New Zealand's Flavoured Beverages Group Holdings Ltd for US$1.3b from private equity firms Unitas and Pacific Equity Partners. Asahi is pursuing a regional expansion strategy.
Further consolidation among Mexico's soft drink bottlers
The third quarter provided further evidence of the pursuit of economies of scale through consolidation in the Mexican soft drink bottling market. Coca-Cola FEMSA, a bottling joint venture of Coca-Cola Co. and Mexican drinks group FEMSA (which bought the beverage business of privately owned domestic bottler Grupo Tampico in June), announced the purchase of Corporación de Los Ángeles, SA de CV (Grupo CIMSA) in an all-share transaction worth US$834m.
Local power on display at Serm Suk
In September, Thai Beverage, Thailand's largest beer and whiskey maker, agreed to buy Serm Suk, the local bottler of Pepsi beverages, for US$513m. Thai Beverage has bought PepsiCo's 42% stake for THB58 per share and launched a tender offer for the remaining shares at the same price.
Nestlé's sweet tooth
In July, Nestlé announced that it had agreed to buy a 60% stake in Hsu Fu Chi, a leading Chinese confectionery manufacturer and distributor, from the founding Hsu family for US$1.7b. The deal is Nestlé's second in China this year: in April, the Swiss manufacturer bought a 60% stake in Yinlu Food Groups, which makes peanut-flavored drinks and canned rice porridge.
Show me the dough
Ralcorp Holdings, the US private label food group, in August announced that it had purchased Sara Lee's North American private brand refrigerated dough business for US$545m. For Ralcorp, the deal represents part of its strategy to increase its focus on private label. For Sara Lee, the transaction follows its decision at the start of the year to split into two publicly traded companies.
Capturing more of the value chain
The third quarter top 10 deals provided two examples of emerging market consumer products conglomerates making non-consumer product acquisitions aimed at strengthening their position in local distribution networks or supply chains. The first example is CJ CheilJedang Corp., a food and beverage manufacturing affiliate of South Korea's CJ Group, acquiring an 18.8% stake in logistics firm Korea Express for US$867m.
The second example is beverage, food and retailing conglomerate China Resources Enterprise Ltd. (CRE) announcing it had agreed to buy department store and supermarket chain Jiangxi Hongkelong Department Store Investment Co. for US$573m in order to expand its retail division.
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