Page 70 - Food&Drink Magazine November-December 2021

MERGERS & ACQUISITIONS
The deal makers
The year started at a cracking pace and didn’t slow for anyone. With deals big and small, the food and beverage sector proved to be as dynamic as ever. Kim Berry writes.
DISTRIBUTOR ACCESS
For a deal announced in August 2020, June 2021 brought closure. The Australian Competition and Consumer Commission (ACCC) gave Woolworth’s proposed acquisition of PFD Food Services the go ahead.
The $552 million acquisition involves Woolies buying a
65 per cent stake in PFD as well as 100 per cent of PFD’s freehold properties, including 26 distribution centres.
This caused all manner or ructions in the industry, primarily around competition. In May, five peak bodies across Australia urged the commission not to greenlight the acquisition because of the “significant damage” it could cause small businesses in the sector.
The two companies even offered up a behavioural undertaking, outlining a degree of separation and
independence between the two
companies for three years after the acquisition. Ultimately, the ACCC said
while concerns were expressed
by some suppliers, many others were not. ACCC chair Rod Sims said a key factor for the latter was that PFD accounts for roughly two per cent of overall demand from food suppliers. PFD will continue to operate independently under CEO Kerry Smith. A separate board and governance structure will now be implemented.
CLOSING THE DEAL
2021 started with unfinished business from 2020. In February, Coca-Cola European Partners (CCEP) increased its offer to acquire Coca-Cola Amatil in a bid to appease shareholders who said the initial October 2020 bid
was too low. CCEP
raised its price by
5.9 per cent, from
$12.75 per share to $13.50, declaring that
its best and final offer.
That worked a
treat. The Supreme
Court of NSW
approved the Scheme
of Arrangement,
CCEP announced a
name change to
Coca-Cola Europacific Partners, and the new entity became the world’s largest Coca-Cola bottler, employing more than 33,000 people with roughly two million customers in
26 countries. Clearly a humble man, CCEP CEO Damian Gammell said it was “a significant moment”.
ROSELLA FLYING
Meanwhile, another iconic company Arnott’s was busy implementing
its strategy to expand from biscuit
manufacturer to regional powerhouse
of consumer food brands. We had a heads up in late 2020, when the company purchased the beleaguered
Freedom Foods Group’s Snacks and Cereals division for
$20 million. Then in February, it acquired
75 per cent one of the country’s largest private label companies in the
sector, Diver Foods. The business had been
operating for 18 years, producing its own brands and private label muesli and cereals, porridge oats, nut, cereal, protein, and muesli bars. Diver Foods owner and managing director Chris Diver retained a 25 per cent stake in the business and said he saw huge potential by joining Arnott’s.
It was at the same time Arnott’s CEO George Zoghbi said it was no secret the group wanted to expand locally, that it was going to do so through acquisitions and innovation and had created a whole new division – Good Food Partners – to do so.
A few months later, Arnott’s acquired New Zealand premium cracker business 180degrees to provide a platform for the company to strengthen and diversify its New Zealand presence.
CRACKER OF A SALE
March made many of us realise that crackers are where it’s at. Mondelez International acquired Australian premium cracker manufacturer Gourmet Food Holdings for a rumoured $400 million dollars. The global FMCG giant said it gave the company an entry into a whole new snacking market in the health and wellness space.
In just six years, Todd Wilson and partners had turned a start-up of four people, one line, four products into a company with probably the largest purpose-built cracker facility in
the world, capable of producing 250,000 crackers an hour, manufacturing six distinctive product types on eight production lines with 120 SKUs. Its main brands are OB Finest, Olina’s Bakehouse and Crispbic. For Mondelez, Gourmet Foods complemented its geographic scale and coverage and it planned to build the portfolio and expand globally.
70 | Food&Drink business | November - December 2021 | www.foodanddrinkbusiness.com.au