Chipita will be acquired by Mondelez for $2 billion
Chicago With the deal to buy Chipita SA, a quickly expanding international maker of packaged cakes and pastries, Mondelez International, Inc. is expanding its presence in the global baking market.
Chipita, an Athens-based company, had sales of over $580 million in 2020. The company sells its goods largely under the 7Days, Chipicao, and Fineti brands. These include croissants, bagel chips, cake bars, biscuits, and spreads. As a leader in the world of biscuits, crackers, chocolate, and other confections, Mondelez would expand its product line with the addition of Chipita.
The chairman and CEO of Mondelez, Dirk Van de Put, stated that Chipita is a perfect fit for the company’s plan to expand into the worldwide snacking market.
Mr. Van de Put stated, “They are a strong strategic complement to our existing portfolio and future growth ambitions in Europe and beyond because of their iconic brands and significant scale across so many attractive geographies.”
Two billion people can purchase Chipita goods, which are produced in 13 manufacturing facilities and sold in over 50 countries, including the US.
“The acquisition will allow Mondelez International to meet the growing consumer demand for this segment by offering a broad bakery portfolio, including cake, biscuits, and now pastry,” the company stated.
The business described the Chipita market sectors as “priority adjacent snacking categories such as croissants and bake rolls,” and said that Chipita gave Mondelez a foothold in the “attractive $65 billion packaged cakes and pastry category.”
Since 2017, Chipita has been a part of CCP in North America, a joint venture with Catamo and Alberto Romo of Proan, a significant Mexican food company. Under the Vuala brand, the company offers small croissants for sale in Mexico.
According to Mondelez, the acquisition will increase the company’s market share in Chipita’s main regions of central and eastern Europe.
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“In order to expand the brands’ reach into new countries in the region and beyond, Mondelez International will leverage Chipita SA’s Central and Eastern European distribution network capabilities to improve its own distribution within the region,” the company stated. “By expanding Mondelez International’s recognizable chocolate brands into new categories, the agreement will also present innovation and co-branding opportunities.”
Mondelez said that the acquisition will boost revenues right away even though it will cost more than three times Chipita’s yearly sales. The agreement’s closing is contingent upon antitrust approvals. Both fresh loan issues and available funds will be used to finance the acquisition. Britchip, a joint venture in India, and a Chipita meat-processing company are not included in the deal.
Earlier in 2021, Mondelez purchased US better-for-you snacking firm Hu, as well as leading Australian company in the premium cookie and cracker sector Gourmet Food Holdings, UK’s Grenade, and the US’s better-for-you snacking company Hu.
Although the specifics of the previous agreements were not made public, Chipita looks to be a far larger acquisition, and less than a month ago, Mr. Van de Put expressed doubts about the likelihood that Mondelez would make any significant acquisitions very soon.
“We’re certainly open to it if there would be a larger acquisition that would provide us the opportunity to get bigger in snacking and/or get an accelerated growth rate,” he stated on a call with investment analysts in late April. “But we’re hesitant because it’s just so hard to find. Finding the right large acquisitions is much harder.”