M&A

Katjes to expand in France with former Mondelēz candy brands

31-Aug-2018 - Last updated on 31-Aug-2018 at 09:06 GMT

Katjes is set to expand in France with former Mondelēz candy brands. Pic: Creative Commons Zero

Katjes International is hoping to merge its French and Belgian businesses with CPK, an independent chocolate confectionery production group that French investment firm Eurazeo formed last year after buying a collection of Mondelēz’s European candy brands.

However, the company noted the deal, which still needs approval from the antitrust authorities, is likely to be completed in 2018.

“The merger would create a new confectionery heavyweight in France,” said Katjes.

“With the proposed transaction, [we] will remain true to our growth strategy of driving forward our presence in major Western European markets through acquisitions or strategic investments.

“The merger is also expected to strengthen the equity of Katjes International,” added the company.

‘Future French confectionery and chocolate champion’

Mondelēz divested some of its non-core brands to Eurazeo last year, including Poulain, Krema, La Pie Qui Chante and Terry’s, as well as the Pastilles Vichy and Rochers Suchard, according to the company’s spokesperson Valerie Moens.

She noted the transaction also included some of Mondelēz’s manufacturing plants, “as such, we do not [currently] manufacture products for Eurazeo/CPK.”

Although these candy brands were a tangential business to the Cadbury producer, they are expected to become “a future French confectionery and chocolate champion” under CPK, Eurazeo said earlier.

“To reach this objective, marketing and advertising investments will be almost tripled,” said Eurazeo, adding that CPK revenue for its branded products was €250m ($292m) last year, and in four years, its organic growth is expected to exceed 20% with additional co-manufacturing business with Mondelēz.

It is noted 68% of CPK’s share capital is currently owned by Eurazeo, and the rest 32% is owned by a group of co-investors.

International markets expansion

Katjes has been on an acquisition spree in recent years to actively expand its international footprint.

The company snapped up Cloetta’s Italian operation for $54.3m a year ago and became the number two player in Italian sugar confectionery with an 18% share, following the market leader Perfetti Van Melle.

Since the acquisition, Katjes’ 2017 revenue has increased by 19.7%, reaching $328.7m. The company’s managing shareholder, Tobias Bachmülle, also shared a positive outlook for 2018.

“We plan to continue our sustainable course in 2018 and beyond,” he said previously. “For the current financial year, the company is expecting consolidated revenues between $379m and $404m, representing a further increase of at least 15%.”