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Birds Eye owner Nomad Foods has agreed to buy the continental European business of Findus for £500m.
Nomad has entered into an option agreement with LionGem Sweden 1 AB, a company backed by a group of investors, including Highbridge Principal Strategies, Lion Capital LLP and Sankaty Advisors, to acquire Findus Sverige AB and its subsidiaries.
Nomad will acquire Findus Group’s continental European businesses in Sweden, Norway, Finland, Denmark, France, Spain and Belgium, including the Findus, Lutosa, and La Cocinera brands in these markets.
The remaining part of the Findus Group, including Young’s Seafood Limited in the UK, will remain under the ownership its existing ownership.
The operations being acquired include approximately 1,500 employees and 6 manufacturing facilities in Norway, Sweden, France, and Spain as well as the intellectual property and commercialisation rights in the relevant territories. Annual revenues are approximately €600 million with an adjusted EBITDA margin of approximately 11%.
The deal is expected to close in the fourth quarter of 2015.
Stéfan Descheemaeker, Nomad’s CEO said: “This transaction is in line with our growth strategy, an exciting addition to the Nomad portfolio, and a significant milestone in reaching our goal of building a global consumer foods company.
“While the operations we are acquiring are strong, attractive assets on their own, combining them with our existing businesses creates a unique value proposition and unlocks new growth opportunities. The Findus name is well-loved and iconic across the European continent, and having the businesses under one umbrella brings together two talented, world-class teams, enabling us to share best practices and to elevate and evolve the brand as we bring an even greater choice of products to consumers.”
Morning update
It’s a busy morning today after a dearth of news this week.
Nestlé has issued its first half results, with the consumer giant seeing sales ofCHF42.8bn which represents organic growth of 4.5% during the period.
Total sales were impacted by foreign exchange (-5.8%), so Nestlé’s real internal growth was a more modest 1.7%. Acquisitions, net of divestitures, contributed 1% to sales.
Trading operating profit margin 15.0%, up 20 basis points in constant currencies, with net profit coming in at CHF4.5bn.
Nestlé also reaffirmed its full-year growth target, restating its aim to achieve organic growth of around 5% with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency
Paul Bulcke, Nestlé CEO said: “The first half results were in line with our expectations, broad-based across categories and geographies, solid even in difficult circumstances, and consistent with our strong performance over time. They reflect the relevance and strength of our Nutrition, Health and Wellness strategy and our discipline in execution. Our investments in the new growth platforms Nestlé Health Science and Nestlé Skin Health are delivering and complement the good momentum in our food and beverages businesses. This allows us to confirm the outlook for the full year.”
Elsewhere, Coca-Cola HBC (CCH) announced a 3.8% increase in volumes for the six months to 2 July.
The volume growth (which falls to 1.3% excluding the 2.5% contribution from the four extra selling days in Q1) was driven by developing markets, which saw volume growth of 6.2% Established market volumes were largely unchanged.
Net sales revenue declined by 1% to €3.15bn as a 4.6% adverse impact from currencies more than offset volume gains. Comparable EBIT was €219.0 million - up 31.2%, leading to a 170 basis point improvement in EBIT margin driven by favourable input costs, increased volume and cost efficiencies.
Dimitris Lois, CEO of Coca-Cola HBC said: “”Difficult conditions remain in many of our markets, particularly in Russia, although we have proven to be adaptable and resilient in such markets. Conditions are more favourable in Eastern Europe and Nigeria, where we are confident of further growth. We have become more optimistic as the year has progressed and remain confident that 2015 will be a year of volume growth and progress on margins.”
After a strong start to trading today the FTSE 100 is up 1% to 6,634.4pts so far this morning.
Coca-Cola HBC has leapt 6.6% to 1,410p on its first half volume growth, while Nestle is up 2.2% to €73.80. Reckitt Benkiser has also opened up 1.6% after its falls yesterday, climbing back to 6,001p in early trading.
Yesterday in the City
Unilever (ULVR) acted as a drag on the FTSE 100 yesterday on another of falling prices. The global consumer group’s stock fell 4.3% to end the day at 2,788p after investment bank Goldman Sachs cut it from “neutral” down to a “sell”. The downgrade was prompted by the rise in e-commerce and the continuing slowdown of emerging markets.
The blue-chip index itself fell another 93.4 points (or 1.4%) as a result of Unilever falling as well as the continued fallout from the devaluation of the Chinese yuan, with mining companies feeling the pain.
On a day of big falls for most grocery shares, online grocer Ocado (OCDO) was down again by 3.9% to 359.7p as the market continues to worry about the effects of Amazon becoming a big player in the food market.
The big listed supermarkets continued their fall. Morrisons (MRW) was also down 3.2% to 175.7p – 4.7% for the week – Tesco (TSCO) was down 2.6% to 204.2p – 5.6% for the week – as news hit the papers that it may only get £700m from Dunnhumby sale, not £2bn, and Sainsbury’s (SBRY) fell another 2.3% to 252.3p – 5.5% for the week.
Reckitt Benckiser (RB) took a hit, with shares down 2.8% to 5,954p, after the CMA decided it needed to give the license for K-Y Jelly brand in the UK to a rival amid competition fears.
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