22 Aug 2016 Mondelez International takes another Cadbury bite
Mondelez International has agreed to purchase the global license for Cadbury-branded cookie biscuits from the UK’s Burton’s Biscuit Company.
Ownership of this license will enable Mondelez to manufacture, market and sell Cadbury biscuits around the world, including in North America, the UK, France, Ireland and Saudi Arabia.
Birmingham-based Burton’s has held the licence in perpetuity under a deal signed in 1986 with Cadbury.
Both companies have agreed to a co-manufacturing arrangement in which Burton’s factories and employees will continue producing Cadbury-branded biscuits.
The deal is subject to regulatory approval. Though neither company has disclosed the deal’s financial details, UK media reports estimate the deal’s value at about £200m ($260m).
Insights from FoodDive.com
“The transaction will help us to unify and expand our global Cadbury biscuits portfolio in key markets and enable us to explore delicious new products by using the best of our chocolate and biscuit innovation platforms,” said Hubert Weber, executive vice president and president of Mondelez Europe, in a statement.
The announcement is Mondelez’s first attempted deal since Hershey rejected the company’s $23bn takeover offer in late June. Still, Mondelez hasn’t slowed its global expansion, having announced last month it would be bringing its Milka chocolate brand to China, a $2.8bn chocolate market.
Chocolate and cookie biscuits have innovation and synergistic opportunities Mondelez is now better positioned to explore worldwide.
The Cadbury license could help Mondelez revive sales, which have been falling consistently, including a 17.7% decline in the most recent quarter and a 13.5% dip in full-year 2015 sales.
Organic net revenue growth came in at 1.5% last quarter, which demonstrates continued global demand for Mondelez’s products. The divestment of Mondelez’s coffee business to create Jacobs Douwe Egberts has accounted for some of the lost revenue.
Source: FoodDive.com