Mondelēz International Inc (NASDAQ: MDLZ) announced yesterday that it will acquire the European snacking company Chipita S.A. for $2 billion. Mondelez International CEO and Chairman Dirk Van de Put was on CNBC to discuss how the deal will benefit both companies.
The deal will add $580 million of Chipita’s revenues to the snacking giant’s financial results and is expected to be immediately accretive to earnings per share upon the completion of the acquisition.
Merits of the deal for the two companies
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Chipita has a strong distribution network in the central and eastern European countries. The deal gives the global snacking giant access to that network. Chipita’s bakery products will be a new category in the portfolio of Mondelēz and can take advantage of the company’s network to sell its bakery products into newer markets.
“Welcoming Chipita S.A.’s delicious pastry products into the Mondelēz International family advances our strategy to become the global leader in broader snacking,” said Mondelēz’s CEO in a statement released by the company.
Chipita’s CEO, Spyros Theodoropoulos, said:
“Chipita, for more than 40 years, based on quality and innovation created a new category of snacks loved by consumers internationally. I am certain that the acquisition of Chipita by Mondelēz International, one of the world’s leading snacking companies, will create new prospects for its people and products.”
Snacking will continue to grow in the post-pandemic world
The company’s snacking categories were growing by around 3% before the pandemic hit. During the lockdowns, consumers were eating a lot more snacks than before, which has subsided in recent months but is still above the pre-pandemic levels.
On how easing of lockdowns will act as a tailwind for the company, the CEO said
“Consumers also tend to snack a lot when they are mobile so we don’t expect the return to mobility to affect the snacking markets.”
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