Consumer products deals activity overview

Big-ticket beverage deals leading the way

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The top 10 deals in Q3 12 had a combined value of US$20.7b, 85% of total deal value.

Four were beverage transactions, four were food deals, and the remaining two were in the household and personal care sector. All the buyers were corporations.

"Companies are willing to pay high multiples for assets that have strategic value and they know well."– Andrew Cosgrove, Global Consumer Products, Lead Analyst

Thai Beverage opts for soft drinks over beer

In September, Thai Beverage broadened its portfolio in the consumer products market while also acquiring real estate assets. TCC Assets, a special-purpose acquisition vehicle formed by Thai Beverage, made a mandatory tender offer to acquire the remaining 69.6% stake it did not already own in F&N, the Singapore-based beverage and real estate conglomerate for US$7.2b.

Heineken takes control of APB

In the same month, Dutch brewer Heineken gained control of APB, F&N’s joint venture with Heineken and the maker of Tiger beer. F&N’s shareholders accepted an offer of US$4.5b for their 39.7% stake and related assets. Heineken also paid a further US$1.5b to acquire a further 13.7% from other shareholders, bringing the total consideration to US$6b.

Itochu boosts its presence in China

In September, US produce group Dole Food sold its global packaged food and Asian fresh food businesses to Japanese conglomerate Itochu for US$1.7b. Itochu has interests in textiles, machinery, aerospace, energy, finance, real estate, food and other industries. Dole will retain its North American fresh vegetables business as well as its fresh fruit businesses in North America, Latin America, Europe and Africa.

Campbell Soup opts for the healthy option

In July, Campbell Soup announced that it had purchased California-based Bolthouse Farms, which makes vegetable juices and sells fresh carrots, for US$1.6b from private equity firm Madison Dearborn Partners. Campbell will combine its V8 brand with Bolthouse’s drinks business to create a “healthy beverage platform.”

For Peet’s sake

In July, Johann A. Benckiser, the investment vehicle of Germany’s billionaire Reimann family, agreed to pay US$1b for Peet’s Coffee & Tea, the US-based specialty coffee roaster and marketer of fresh coffee and tea.

The deal comes two months after Benckiser, which owns Coty, the world’s largest fragrance company, withdrew its unsolicited US$10.7b offer for Avon Products.

P&G buys out Spanish JV partner

P&G’s decision to buy out its Spanish joint venture partner in its European feminine care and diaper business for US$973m illustrates another investment theme being pursued by consumer products groups, which is to increase the size of their stakes or buy out the minorities in businesses in which they already have an ownership interest.

P&G has operated a 50:50 joint venture with Barcelona-based Agrolimen Group, known as Arbora y Ausonia, since 1989, but decided to seek full control.

Consolidation in the Norwegian grocery market

In August, Norwegian conglomerate Orkla bought family-owned Norwegian food group Rieber & Søn for US$861m. Orkla will buy Rieber family’s 90.1% stake and then make a mandatory purchase of the remaining shares.

The deal will give Orkla, which has interests in aluminum, finance, food, household and personal care, a larger share of Norway’s grocery market, where it is already the biggest player.

Supplementing top-line growth with vitamins

In August, Church & Dwight agreed to purchase Avid Health, a vitamin supplement manufacturer, for US$650m. Avid has a market-leading position in gummy vitamins in the US and the company’s brands — the L’il Critters range for children and the Vitafusion range for adults — are both the No. 1 brands in their segments. Church & Dwight will finance the deal through cash and newly issued debt.

Campari enters the rum market

In early September, Italian drinks group Davide Campari-Milano announced the acquisition of 100% of Jamaican rum producer Lascelles deMercado (LdM) for US$415m from Caribbean financial conglomerate CL Financial. Campari agreed to buy an 81.4% stake from several shareholders and will make a tender offer for the balance.

Snack Factory snapped up by Snyder’s-Lance

Also in early September, snack food manufacturer Snyder’s-Lance agreed to buy Snack Factory from private equity group VMG Partners for US$340m. Snack Factory introduced the first flat pretzel-shaped cracker under the Pretzel Crisps brand and gained market share in the deli-bakery section of grocery stores in the US.


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Top 10 deals in Q3 12

Buyer name Buyer country Target name Target country Disclosed value (US$m) Announced date Deal type Sector Cross-border or in-border
Thai Beverage
PCL
Thailand Fraser and Neave Ltd Singapore $7,203 13-Sep-12 Corporate Beverages Cross-border
Heineken NV Netherlands Asia Pacific Breweries Ltd Singapore $6,015 20-Jul-12 Corporate Beverages Cross-border
Itochu Corp Japan Dole Food Company
(packaged foods)
United States $1,685 13-Sep-12 Corporate Food Cross-border
Campbell Soup
Co
United States Wm Bolthouse Farms Inc United States $1,550 9-Jul-12 Corporate Food In-border
Johann A
Benckiser
Austria Peet’s Coffee & Tea Inc United States $1,017 23-Jul-12 Corporate Beverages Cross-border
Procter &
Gamble Co
United States Arbora y Ausonia SL Spain $973 19-Jul-12 Corporate HPC Cross-border
Orkla ASA Norway Rieber & Søn ASA Norway $861 20-Aug-12 Corporate Food In-border
Church & Dwight
Co Inc
United States Avid Health Inc United States $650 20-Aug-12 Corporate HPC In-border
Davide Campari-
Milano SpA
Italy Lascelles deMercado & Co Ltd Jamaica $415 3-Sep-12 Corporate Beverages Cross-border
Snyder’s-Lance
Inc
United States The Snack Factory LLC United States $340 5-Sep-12 Corporate Food In-border
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Source: EY’s analysis of Thomson Reuters data.