Mondelēz International Inc revealed that it has struck a definitive agreement to sell its developed-market gum business in the US, Canada, and Europe to top European gum and confectionery maker Perfetti Van Melle Group for $1.35 billion.
The Chicago-based snack maker noted that the headline purchase price of $1.35 billion is 15 times equivalent to the estimated current year earnings before interest, taxes, depreciation, and amortization (EBITDA).
The sale includes manufacturing facilities in Rockford, Illinois, and Skarbimierz, Poland, and the gum brands Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubblicious in the US, Canada and Europe. It also includes the European candy brands Cachou Lajaunie, Negro, and La Vosgienne.
Investors reacted positively to the news, sending Mondelēz shares up slightly to $66.22 on a day the broad market was deep in the red.
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Mondelēz has retained its emerging market gum business across Latin America and Asia, the Middle East, and Africa. It will continue to operate its gum business outside the US, Canada, and Europe, led by Stride in China, as well as all of its other candy brands and products.
“As we continue progressing our Vision 2030 focus and acceleration strategy, doubling down on our core snacking categories, we are pleased to transition our developed market gum business to a values-led, family-owned company whose portfolio is a strategic fit, and where our brands and people can thrive,” said Mondelēz CEO Dirk Van de Put in a statement.
The Mondelēz developed market gum business complements the Perfetti Van Melle portfolio — including iconic global brands such as Mentos, Chupa Chups and Alpenliebe.
“Perfetti Van Melle will be an excellent home for the management team and employees of Mondelēz’s gum business in North America and Europe,” said Egidio Perfetti, who is the chairman of Perfetti Van Melle Group.
Mondelēz’s Vision 2030 strategy aims to generate 90% of revenue in chocolate and biscuits, including baked snacks — categories identified with significant growth opportunities for the company — up from 59% in 2012 and 80% currently.
The transaction is expected to close in the fourth quarter of 2023. The definitive agreements cover the sale of the business in the US, Canada, and Europe excluding France. The parties have entered into exclusive arrangements for the sale of the business in France.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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