The proposed deal includes Terry’s brands, Poulain, Carambar, La Pie Qui Chante and Krema, as well as the Pastilles Vichy, Suchard Pralines and Malabar licenses.
Eurazeo has not revealed the other brands, but ConfectioneryNews understands Spanish candy brand Dulciora and other French candy and chocolate brands are included in the deal.
The former CEO of Orangina-Schweppes France Patrick Mispolet and ex-CEO of Spotless Pierre Le Tanneur will also invest and become non-executive directors of the new group
Under the transaction, Eurazeo would acquire five plants in France (Blois, Marcqen-Baroeul, Saint-Genest, Strasbourg and Vichy). Around 750 employees are expected to join the new confectionery business as Terry's production will shift from Poland and Slovakia to France.
‘Life sometimes holds unique opportunities’
Pierre Le Tanneur said: “Life sometimes holds unique opportunities: creating a new player in the formidable confectionery and chocolate market is one, achieving this with the backing of a shareholder as experienced and insightful as Eurazeo is another.”
Eurazeo hopes to revitalize the brands with a new team. the deal is expected to close by Spring 2017 subject to clearance from French antitrust authorities.
Private equity firm Eurazeo is a key shareholder in more than 20 companies such as AccorHotels, and Europcar. It was the controlling shareholder of Danone for over 30 years, but began selling off its shares in 2008.
Mondelēz: Brands were overshadowed
In December last year, rumours surfaced that Mondelēz had plans to offload assets in France, Netherlands and Spain for sale and had appointed Lazard to sell Terry's Chocolate Orange and Terry's All Gold.
Since last year, the company has been rationalizing its brand portfolio and recently axed Cadbury Pink Snack and shifted Time Out production from Ireland to Poland.
Christophe Dandoy, director of communications for Mondeelēz in France, told ConfectioneryNews: “Because of the acquisition of Cadbury we owned so many brands and we can’t invest in every brand.”
He said Mondelēz was investing heavily in Milka and Côte D’Or in France as it faces rising competition from Lindt.
“It’s complicated for us to invest in other brands that are overshadowed,” he said. “But it doesn’t mean we will divest all the small brands.”
Analyst's view
Jack Skelly, food analyst at Euromonitor International, told this site Mondelēz's sell off made sense given its commitment to cutting costs and getting rid of less profitable brands.
"Most of these brands are achieving low sales growth, do not have international appeal (into the likes of Asia Pacific, as almost all of their sales stem from France and the UK) and cannot be streamlined into Mondelēz's star brands (e.g. Milka, Cadbury’s, Cote D’Or). Mondelēz also has a huge number of brands so streamlining is important."
He added that Terry’s was "extremely seasonal" and didn't enjoy the same popularity as other brands like Crème Egg.
Euromonitor estimates the five key brands in the deal - Terry’s, Krema, Poulain, Carambar and La Pie Qui Chante - account for at least $300m in retail sales.
"Eurazeo will be looking to increase revenues in the UK and France, which are two of the biggest chocolate markets in the world," added Skelly.