Merger and acquisition in candy industry

clicks:1844    update:2010-8-22

in  News & Analysis section, the report on the latest flurry of acquisitions, such as Lotte’s pickup of the E.Wedel brands from Kraft Foods, Grupo Bimbo’s take-over of Dulces Vera and the Oryxa Capital purchase of Kraft Foods’ Kandia-Excelent business in Romania.

The E.Wedel and Kandia-Excelent acquisitions were to be expected, of course, since the EU Commission had ruled that in order for Kraft to purchase Cadbury, it had to divest itself of certain businesses to ensure competitiveness within those markets.

Most observers had expected Nestlé to pick up the E.Wedel business, which would have complimented its chocolate business in Poland. The fact that Lotte acquired it sends yet another signal that the Japanese multinational is a force to be reckoned with in the global confectionery sector. And remember, the E.Wedel acquisition follows Lotte’s pickup of Guylain two years ago.

But Lotte isn’t the only company that’s been aggressively expanding. Grupo Bimbo, one of the largest bakery conglomerates in the world, has turned its sights to snacking these days, garnering both sweet and savory companies. Its Dulces Vera acquisition provides a good fit strategically and logistically. Moreover, I suspect there will be a few more add-ons before Grupo Bimbo’s done.

Meanwhile, Oryxa Capital’s decision to pick up the Kandia-Excelent business reaffirms investors’ confidence in confectionery operations.