Mondelez International Inc., the packaged-food giant known for Oreo cookies and Ritz Crackers, agreed to buy European snack maker Chipita SA for about $2 billion.
Chipita had about $580 million in revenue in 2020 and has “a proven track record of consistent growth from its portfolio of croissant and baked snack brands,” Mondelez said in a statement. The company, which is based in Greece, employs about 5,100 workers and produces in 13 plants. Its goods are delivered to more than 50 countries. Rothschild & Co. advised Chipita on the deal.
Mondelez will fund the acquisition with a combination of new debt and cash on hand. It expects the purchase to immediately contribute to profit growth.
The acquisition broadens Mondelez’s presence in the snack market during a pandemic that has boosted demand for packaged foods. The company said it will also “significantly” increase its presence in the Central and Eastern European regions.
Mondelez, which saw sales expand in 2020 after years of negative or stagnant growth, has been on the hunt recently for new sources of revenue. In March, it announced the purchase of U.K. sports nutrition company Grenade for 200 million pounds ($283 million). Last year, it agreed to buy Give & Go Prepared Foods Corp., a Canadian maker of a brownies brand, for $1.2 billion.
Mondelez shares were little changed on Wednesday in New York. The stock rose 9% this year through Tuesday.
The world’s largest food companies have sought in recent years to acquire smaller, faster growing companies while off-loading non-core assets. Unilever Plc sold off its large margarine and spreads business in 2018 and has since snapped up brands including Tazo tea, Sundial Brands and Carver Korea. It has also acquired Graze, the U.K. healthy snacking company, Dutch faux-meat maker the Vegetarian Butcher, and a Romanian ice-cream producer.
Nestle SA, the world’s largest food company, has shed its U.S. confectionery unit and put its ice cream business there into a joint venture in order to focus on acquiring nutritional supplements and vitamins. It’s also expanding its coffee and plant-based businesses.
— With assistance by Deirdre Hipwell, Corinne Gretler, and Sotiris Nikas
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