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Nestle acquires assets of Kraft Foods in the U.S. and Canada

January 8th, 2010

nestle_logoNestle announced the acquisition of three thousand 700 millions of Dollars from the U.S. sector activities of Kraft Foods in the U.S. and Canada.

So far, Nestle held a position of second order in the frozen pizza industry in the United States. With this operation, the group expanded its presence in this market, the largest in the world with approximately 37 billion Dollars in annual sales, according to a statement.

Last year, Kraft Foods had a turnover estimated at 2100 million Dollars in this sector, said Nestle. “The frozen pizza activity strengthens significantly the frozen segment of Nestle in America”, estimated the general manager of the food world leader, Paul Bulcke.

Parallel to the operation released, Nestle also said had no part in a public bid for the British candy maker Cadbury, coveted by Kraft Foods, which has decided to redouble his bet. Indeed, the U.S. food giant announced that will devote the net proceeds of sales of its business to Nestlé from its pizza’s activity in NorthAmerica to finance a cash bid for Cadbury, which extended until 2 February.

The current offer, which Cadbury has already rejected, is made of a mixture of cash and shares “300 pence and 0,2589 Kraft’s shares, i.e. about 740 pence per Cadbury’s share and values the British group in a little over 11 billion Euros (15900 million Dollars).

In a statement to the London Stock Exchange after the announcement of the merger with Nestlé, the U.S. giant point out that it is going to spend “an amount equivalent to the entire net proceeds of this sale to finance a partial cash alternative of its bid for Cadbury’s.

The U.S. group will use the proceeds from the sale to Nestlé to offer 60 pence more in cash instead of shares.

Kraft pointed out that will give all the details on January 19, which is the latest day for the possible increase of its offer, according to the current timetable for mergers in the UK.

The initiative is “the desire expressed by some shareholders of Cadbury to see a larger share of the cash offer and because shareholders of Kraft Foods expressed the hope that this saves more on the use of shares Kraft Foods (nowadays) devalued”.

Kraft Foods “continues to estimate that the stock price is depressed as a result of a number of short-term factors that will disappear when the uncertainties surrounding the supply of Cadbury will be eliminated”.

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