Katjes International has acquired the struggling Italian business of Swedish confectionery company Cloetta for SEK 450 million ($53.4 million).
The deal includes Cloetta Italy’s complete commercial organisation, four production units and all Italian brands – including Sperlari sweets, Saila liquorice and the Dietorelle range of sugar-free confectionery.
It will make German-headquartered Katjes the second largest player in Italy’s confectionery market, complementing its leadership position in France and its number-two position in Belgium.
“As the fourth largest market in Western Europe, Italy was always the focus of our efforts to expand our strong market position,” said Katjes International managing partner Tobias Bachmüller. “With the acquisition of the number two [company] in Italy and its established brands, we have made a significant step towards further growth.”
Cloetta Italy, which is headquartered in Cremona near Milan, had sales of SEK 745 million ($88.3 million) last year. It employs 400 staff across a total of four plants – one in Cremona, as well as further sites in Gordona, four miles from the Swiss border; San Pietro in Casale near Bologna; and Silvi Marina, near Pescara, on the country’s Adriatic coast.
The sale includes Sperlari sweets and Dietor brand of low-calorie sweetener.
“I am very pleased that we have found a new home for our Italian brands, factories and employees,” said Cloetta CEO Henri de Sauvage-Nolting. “We already know Katjes and are well aware of their business experience and good employer track record. I am convinced that they will be able to manage and develop the business going forward. This is a very good solution for all parties and follows Cloetta’s strategy to focus more on its business in northwestern Europe, including the recently acquired Candyking business.”
According to Cloetta’s chief financial officer, Danko Maras, the sale will result in an impairment of SEK 365 million ($43.3 million) and underlines the faltering performance within its Italian business.
“The impairment of Cloetta Italy recognises a challenging business performance over time that has eventually led to this decision,” Maras said. “However, the divestment of Cloetta Italy will enable Cloetta to reach its EBIT margin target of 14% in a more focused way. The divestment will improve Cloetta’s margins and return on capital employed.”
The challenge for Katjes International will be to turnaround the failing business, despite forecasts of a 1% decline in Italy’s sugar confectionery market.
The takeover is expected to be completed within the next three months.
© FoodBev Media Ltd 2020