With the M&A deals on the hike, and more investments flowing in the food industry, it is constantly growing in its revenue and new emerging companies. The food market revenue is expected to reach the value of US$ 970,393 million with the annual growth of 0.8 per cent in 2020.
The food industry consolidation has always been facilitated by the many M&A deals, in a range of sectors within it from pet foods to foodtech, from dairy to confections. And with the number of small producers keeps on increasing, the stronger food enterprises are taking aim from each other. These deals are just an interpretation of how far the companies are willing to go in the race of being the biggest name of the food industry.
Reflecting the profound growth and changes that merger and acquisition deals bring within the food industry ecosystem, here we bring the major M&A deals of the industry.
Kraft Purchased Cadbury
The British multinational Cadbury is a completely Mondelez International enterprise which was originally Kraft foods since it acquired it in 2010. Kraft Foods initially offered a US$ 16.2 billion bid for Cadbury which was rejected stating it as undervalued for the company in 2009. Cadbury finally agreed for the takeover from Kraft foods with the worth of US$ 19 billion in January 2010. For Kraft Foods, the deal was made for expanding their reach in the high growth markets and better growth sectors like candy and gum.
Deal Cost: US$ 19 Billion
Amazon Buys Whole Foods
In 2017, the American MNC technology enterprise, Amazon agreed to buy the supermarket chain Whole Foods with a deal valued at US$ 13.7 billion. This deal launched the e-commerce company directly into more than 450 physical locations fulfilling its desire to sell groceries in various locations. Amazon did not buy Whole Foods for knowing the store operations but for learning about grocery business for converting grocery consumers in the online market.
Deal Cost: US$ $13.7 Billion
Danone Buys WhiteWave Foods
The French food product MNC, Danone agreed to acquire the consumer packaged beverage and food enterprises WhiteWave Foods in 2016 in an all cash deal valued at US$ 12.5 billion. This was the biggest deal till date in the organic and natural food industry. The acquisition was aimed at pursuing affluent customers by the inclusion of popular health food offerings of WhiteWave Foods.
Deal Cost: US$12.5 Billion
JAB Holding buys Panera Bread
The German conglomerate, JAB which is the owner of Peet’s Coffee & Tea and Caribou Coffee announced in 2017 that it is buying the U.S. Bakery chain company Panera Bread in a transaction valued at US$ 7.5 billion. The deal was done as a debt transaction.
Deal Cost: US$7.5 Billion
Just Eat acquires GrubHub
One of the biggest M&A deals of 2020 was the European food ordering company Just Eat agreeing to buy US based GrubHub in an all stock transaction. After completion the US$ 7.3 billion deal would create the world’s largest food delivery enterprise outside China. The deal was done with the mission of building an accompaniment around the four largest profit pools of the food delivery market across globe UK, US, Germany and Netherlands.
Deal Cost: US$7.3 billion
Smucker Buys Big Heart
JM Smucker announced completing the acquisition of pet band Big Heart in a stock and cash combined transaction which was valued at around US$ 5.8 billion in 2015. The equity portion of this M&A deal was done through a US$ 1.75 billion bank loan and US$ 3.65 billion bond. The acquisition gave Smucker a significant and immediate presence in the growing pet snacks and food industry.
Deal Cost: US$5.8 Billion
Coca Cola acquires Costa Coffee
The American MNC beverage company Coca-Cola announced completion of the acquisition of Costa Coffee Limited in a US$ 4.5 billion transaction which was followed by the approval from the European Union and China regulatory authorities. The deal was announced in 2018. The main rationale behind this M&A deal was the capability of Costa Coffee and the marketing and distribution expertise of Coca Cola.
Deal Cost: US$5.1 Billion
Froneri International’s deal with Nestle
Nestle announced selling its ice cream business in the US in a US$ 4 billion transaction to Froneri. Nestle and PAI partners combined the European ice cream business of Nestle and the R&R owned by PAI for creating Froneri in 2016 to be one of the largest ice cream companies in the globe. This deal was a move towards becoming the world’s best ice cream company.
Deal Cost: US$4 Billion
Sysco acquires Brakes Group
Sysco announced the US$ 3.1 billion M&A deal of acquiring Brakes Group owned by the America based Bain Capital Private Equity in 2016. The deal included the repayment of around US$ 2.3 billion financial dept of the Brakes Group. The transaction was done to expand this footprint of Sysco in Ireland, UK and Europe for positioning the company for the future expansions.
Deal Cost: US$3.1 Billion
ConAgra Foods Buys Ralcorp
Ralcorp Holdings, the manufacturer of food products received the acquisition offer from the American packaged food enterprise, ConAgra Foods which was rejected by the company in 2011. ConAgra officially announced purchasing Ralcorp in a US$ 4.95 billion transaction in November 2012. The acquisition deal completed in 2013 January made the Chicago headquartered ConAgra the biggest private label package food company in the US at that time.
Deal Cost: US$ 4.95 billion
There are definitely more impactful and more valued M&A transactions coming up in the food industry in the recent times. And they will shape the industry in different ways, some companies will fail and some will rise with these. But the strategy and aim behind the deals are the takeaways to get.
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