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Nestlé Hellas SA to acquire Delta Ice Cream SA
December 19, 2005 -- Vevey, Switzerland-based Nestlé SA today announced it agreed with ATHEX-listed Delta Holding SA on the acquisition of Delta Ice Cream SA by Maroussi, Athens-based Nestlé Hellas SA for a total enterprise value of about EUR 240 million. With sales of EUR 122 million in 2004 and four production facilities, Delta Ice Cream is the leading ice cream business in Greece as well as in Bulgaria, the Former Yugoslav Republic of Macedonia (FYROM), Romania, and Serbia and Montenegro. Main brands include NIRVANA, BOSS, ALOMA and MAGNUM, which it owns in Greece. The transaction will significantly expand Nestlé's position in the growing ice cream market in Greece and the Balkans. In Bulgaria, for example, Delta International Holdings SA, a wholly-owned subsidiary of Delta Ice Cream, has a majority stake in Delta Bulgaria SA and has invested over EUR 35 million in a distribution centre in Sofia and a factory and distribution centre in Varna. Delta Ice Cream's share of the Bulgarian market for pre-packaged ice cream is estimated to have reached 30%. Delta Ice Cream is listed on the Athens Exchange (ATHEX) and over 96% of the shares are owned by Delta Holding. Following regulatory approval, Nestle will acquire the 96% stake and make a mandatory offer to purchase the remaining shares.
With the acquisition of Dreyer's Grand Ice Cream, Inc. in the United States (by Nestle Ice Cream Company, LLC in June 2003) and Delta Ice Cream, Nestlé continues strengthening its ice cream business worldwide. Internal as well as external growth initiatives over the past years have resulted in Nestle achieving worldwide market leadership in this important sector. Delta Holding's press release On December 19, 2005, Delta Holding released the following statement: "With a consolidated annual turnover of EUR 123 million in 2004, Delta Ice Cream holds the leading position in its sector in the Balkans, having strong advantages and has on several occasions attracted the interest of various potential buyers. By accepting Nestlé's offer, Delta Holding fully captures the future value of its investments in the ice cream sector and successfully achieves its mandate to maximise shareholder value. The final share price will be set immediately prior to the closing date based on the deduction of total debt from business valuation. Indicatively and based on debt levels as of the September 30, 2005, the per share offer price will be calculated at EUR 6.22, which is calculated as follows: EUR 240 million - EUR 109 million divided by 21,092 million shares of Delta Ice Cream. The transaction is expected to be completed in the spring 2006. With this transaction, Delta Holding creates financial resources that will be utilised to develop capabilities and exploit investment opportunities created by its new combined course." Chipita International SA and Delta Holding SA merge
On December 19, 2005, Delta Holding and ATHEX-listed Chipita International SA declared to merge to create a company with annual sales of over EUR 1 billion. Following its board meeting on December 16, Greek croissant and snacks maker Chipita International announced its acceptance of Delta Holding SA's offer and decided to propose, to its general assembly of shareholders, its merger by absorption by Delta Holding.
The absorption of Chipita International will take place in parallel with the absorption of Greek fast-food chain Goody's SA and frozen-food producer General Frozen Foods SA (aka Uncle Stathis) by Delta Holding and the sale by the latter of its total participation in Delta Ice Cream SA with the aim to create the largest company in the food sector in Greece, a power-house of leading food brands, with significant scale in the European market. An organization that is wealthy in human resources, knowledge capital and infrastructure, with international experience, modern professional management and strong corporate governance foundations committed to continue and increase its positive contribution to the Greek economy and society. The transaction will enhance Chipita International's prospects for growth and international expansion for the benefit of its shareholders. During the same meeting, the Board of Directors of Chipita International decided to propose the following, deemed fair and reasonable, exchange ratio: Chipita International shareholders will exchange each Chipita share held today, with 0.33 newly issued shares from the share capital increase of Delta Holding due to the mergers. According to the proposed share exchange ratio, Chipita shareholders will hold approximately 24% share in the combined company. It is noted that the calculation of the proposed exchange ratios, in view of the mergers, takes into consideration that the total Delta Holding convertible bonds will be converted into 3,926,046 newly-issued common shares of the latter prior to execution of the Draft Merger Agreement. The Board of Directors of Chipita International has appointed KPMG to issue a fairness opinion on the proposed merger share exchange ratio. The merger is subject to clearance from the Competition Commission and the necessary consents and other approvals by the competent authorities and the General Assembly of Shareholders of Chipita International. The merger is expected to be completed by July 2006, creating a large Greek company, a power-house of leading food brands and a food sector leader with significant scale in the European market. An organisation that is rich in human resources, knowledge capital and infrastructure, with international experience, modern professional management, strong corporate governance foundations committed to continue and increase its being a positive force to the Greek economy and society. The combined company, based on last 12-month results (October 1, 2004 - September 30, 2005), will have a turnover of EUR 859.1 million, EBITDA of EUR 151.1 million, a presence in 28 countries, and a large portfolio of leading brands in the food sector. The above exclude and do not take into account any of the activities of Delta Ice Cream, which is being sold to Nestlé Hellas SA. Delta-Chipita union: 35th-largest European food processor Upon completion of the merger process, the combined company will be the leader in the food sector in Greece, second in the food and beverages sector, the country's seventh-largest industrial company, the 16th-largest Greek corporation and the 35th-largest European food processor. The combined company will exploit its new capabilities to accomplish, under more competitive terms, its mission -- to create and manage brands that bring health, nutritional value and enjoyment into human life. The company's vision is for its brands to be "the consumer's first choice in the markets it operates". Until completion of the mergers, the combined company’s vision will be encapsulated in the interim name BrandCo, signifying the creation of a "house of leading food brands". The combined company will adopt and present its new corporate identity at the General Assembly of Shareholders. In March 2004, Chipita International announced that its Chipita East Europe Ltd., a subsidiary of Chipita International, agreed to acquire Bulgaria's second-largest snack food maker, Royal Foods Holding, including its brands and production facilities. Olayan Investments Company Establishment (OICE), the parent company and principal controlling entity of The Olayan Group, one of the world's largest investment groups, has minority participations in both Chipita International and Chipita East Europe. As an offshore company it cannot conduct onshore business in Greece. Olayan of Saudi Arabia, which is a Law 89 offshore company with multi-billion dollar holdings in companies ranging from Coca-Cola to Volkswagen, relocated from Beirut in 1975, during the civil war in Lebanon. With its physical headquarters in Glyfada, Athens, OICE now is parent to a global network of subsidiaries ranging from Riyadh to Vienna to London and New York, which manages investments in some 50 wholly-owned companies, joint-ventures and affiliated companies. [company profile of Olayan Investments Company Establishment (OICE)] [premium content] Sources: Delta Holding, Nestlé, INVgr, OICE. Related link:
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