BAT Closes on RAI Acquisition
By Angel Abcede on Jul. 25, 20171. BAT wraps up RAI
LONDON and WINSTON-SALEM, N.C. -- With its $47 billion purchase of the remaining shares of Reynolds American Inc. closing July 25, British American Tobacco became the largest global tobacco manufacturer in terms of sales and access to the lucrative U.S. market.
This major deal between two tobacco giants is just the latest in a list of significant supplier mergers to happen in recent months. Manufacturers in the beverage, snacks and candy categories made significant moves this year.
Here's a look at three more that shook their industries, and three corporate combinations that are still percolating …
2. AB InBev and SABMiller
Anheuser-Busch InBev, Leuven, Belgium, completed its acquisition of London-based SABMiller on Oct. 10, 2016, following approvals by shareholders of both companies and regulatory officials in all the major countries in which the companies operate.
The combined company has operations in virtually every major beer market and an expanded portfolio that includes global, multiple-country and local brands, the company said.
With the completion of the $104 billion deal, AB InBev’s share of MillerCoors, Chicago, were sold to Molson Coors Brewing, essentially maintaining beer-sales share in the United States as it stood at closing: 45% for AB InBev and 26% for MillerCoors.
MillerCoors also took over ownership of the Miller brewing brand worldwide.
3. Conagra buys Thanasi
Conagra Brands Inc., Chicago, entered into a definitive agreement in March to acquire Thanasi Foods LLC, Boulder, Colo., maker of Duke’s meat snacks and Bigs seeds. Financial terms of the deal were not disclosed, and the transaction is still pending regulatory approval. It is expected to close this summer.
Duke’s is a prominent convenience-store meat-snack brand that is growing due to consumers’ desire for better-for-you, artisanal and protein-packed products. And Bigs is known for its premium seed snacks, including jumbo in-shell sunflower seeds, sunflower seed kernels and roasted pumpkin seeds.
4. Ferrero and Fannie May
Tic Tac manufacturer and confectionery giant Ferrero International S.A., Luxembourg, acquired Fannie May Confections Brands, the U.S.-based premium chocolate confectionery manufacturer of the Fannie May and Harry London brands, as well as 1-800-Flowers.com Inc. The transaction closed May 31.
Melrose Park, Ill.-based Fannie May was founded in 1920 in Chicago. The company operates a production facility in Ohio and distribution centers in Ohio and Illinois.
Ferrero will maintain the network of Fannie May retail stores, with plans to grow it over time. Ferrero will maintain its U.S. headquarters in Parsippany, N.J.
Promises and missteps
Other deals are on the horizon or recently fell apart in recent months. Here’s a quick compilation:
- Nestle, Vevey, Switzerland, the manufacturer behind chocolate brands such as Butterfinger, Baby Ruth and Crunch, is exploring options for its confectionery side of the business, including a sale. The review covers the U.S. market only, and the company said in a statement that it expects to complete it by the end of this year. The company, with U.S. offices in Glendale, Calif., will also continue to invest in pet care, bottled water, frozen meals, infant food and ice cream.
- Rumors of Chicago-based Kraft Heinz’s imminent purchase of Mondelez continue to persist in the marketplace even though both companies have refused to comment or denied the news. Mondelez and Kraft have a shared history dating back to 2012 when Mondelez was spun off from Kraft. Since then, there have been several rumors about sales or mergers of Mondelez, which has U.S. headquarters in East Hanover, N.J.
- Also on the Kraft Heinz front, London-based Unilever rejected a $143 billion purchase offer by Kraft Heinz, which would have been the largest takeover ever in the food or beverage industry. A successful bid would have created a consumer-goods giant with brands such as Dove and Heinz ketchup under the same umbrella. Unilever told Bloomberg on Feb. 17 that it rejected the $50 per share proposal because it “fundamentally undervalues” the company, and it didn’t find it necessary to continue further negotiations. For Kraft Heinz’s part, it indicated it would continue to work to gain an agreement on the terms of a potential transaction.