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Consumer Products Deals Quarterly, January-March 2011 - Household names in emerging markets dominate top 10 deals - EY - Global

Consumer Products Deals Quarterly, January-March 2011

Household names in emerging markets dominate top 10 deals

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Top 10 deals Q1 11

Buyer name Seller name/unit name Disclosed value (US$m) Announced Deal type Sector
E.I. DuPont de Nemours & Co. Danisco A/S 6,300 9 January 2011 Corporate Food
Embotelladoras Arca SAB de CV Grupo Continental SAB 2,302 24 January 2011 Corporate Beverages
Diageo PLC TPG Capital LP/Mey Içki Sanayi ve Ticaret AS 2,077 21 February 2011 PE Beverages
PepsiCo, Inc. Wimm-Bill-Dann Foods OJSC 1,413 3 February 2011 Corporate Beverages
General Mills, Inc. Sodiaal SA/Yoplait SAS 1,145 18 March 2011 PE Food
Groupe Lactalis SA Parmalat SpA 1,066 22 March 2011 PE Food
Colgate-Palmolive Co. Unilever PLC/Sanex Deodorant Ops 947 23 March 2011 Corporate HPC
H.J. Heinz Co. Coniexpress S.A. Industrias Alimenticias 603 3 March 2011 Corporate Food
Boparan Holdings Ltd. Northern Foods PLC 542 21 January 2011 Corporate Food
High Liner Foods, Inc. Framtakssjoður Íslands hf/Icelandic Group hf 454 4 January 2011 Corporate Food

"US companies are boosting their emerging markets and international presence through M&A activity."

Gregory J. Stemler, Consumer Products Transactions Leader, Americas, EY

The two dominant investment themes in Q1 11 were the pursuit of growth opportunities in emerging markets and the search for scale and higher-margin businesses in the developed world.

Below are some deals that highlight broader market trends:

Diageo's Turkish delight. In February, Diageo agreed to purchase Turkey's Mey Içki Sanayi ve Ticaret from private equity groups TPG Capital and Actera for US$2.1b in cash.

Heinz adds Brazil to its emerging markets recipe. The pursuit of emerging market growth opportunities is also the rationale behind the acquisition by H.J. Heinz Company, the world's largest manufacturer of ketchup, of an 80% stake in Coniexpress S.A. Industrias Alimenticias.

PepsiCo's slam dunk. Last December1, PepsiCo announced it was acquiring 66% of leading Russian dairy and juice producer, Wimm-Bill-Dann (WBD) for US$3.6b from a group of the company's shareholders and subsidiaries. That transaction brought PepsiCo's ownership to approximately 77% and, following regulatory approval in January, the company made a tender offer of RUB38.3b (US$1.4b) for the outstanding 23% of WBD shares.

Soap swap. Colgate-Palmolive's purchase of Unilever's Sanex deodorant and bath care products business for €672m (US$947m) reflects the pursuit of higher-margin businesses in the developed world, while Unilever's concurrent purchase of Colgate's Colombian detergents business for US$215m fits the emerging markets theme.

In defense of dairy. In March, General Mills agreed to acquire private equity group PAI Partners' 50% stake in Yoplait for approximately €810m (US$1.1b).

DuPont searching for the right ingredients. The quarter's largest transaction and the only mega-deal, was the offer by E.I. DuPont de Nemours & Co. to acquire Danisco, the Denmark-based global ingredients company, for US$6.3b.

Extracting synergies from Mexican bottling. The pursuit of economies of scale is not confined to the developed markets. The quarter's second largest deal was the US$2.3b all-stock merger of Mexican bottlers Embotelladoras Arca, SA de CV and Grupo Continental SAB (Contal) to form Arca Continental.

Cash is king. In January, Boparan Holdings announced a £342m (US$542m) all-cash offer for Northern Foods, a leading supplier of private label chilled ready meals, salads and sandwiches and owner of the Goodfella's Pizza and Fox's Biscuits brands.

Deals spotlight

Top 10 deals
Q1 11

1Consumer Products Deals Quarterly - Recovery still building? - October–December 2010

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