"Kraft is now the world's leading biscuit company, with a strong portfolio of iconic brands," said Irene Rosenfeld, Kraft chairman and CEO. "We'll use our enhanced scale, geographic reach and combined technologies to grow favorites like LU, Oreo and Ritz even faster around the world. This acquisition is part of our plan to create long-term shareholder value, and importantly, will be accretive to earnings per share in the first year."
The addition of Danone's biscuit business will transform Kraft's international business into a stronger contributor to revenue growth. Biscuits will also become the company's largest global business, representing approximately 20% of total Kraft revenues.
"This acquisition gives us a global footprint in biscuits," said Sanjay Khosla, president of Kraft International. "In emerging markets, we will have greater scale. Our business will nearly double in size in the fast-growing China market. We will gain a foothold in both Indonesia and Malaysia for faster expansion. And in Russia, our distribution strength, coupled with Danone's brands, will give us an even stronger presence. In Europe, we will have another strong growth category joining our chocolate, coffee and cheese businesses."
The acquisition includes market-leading biscuit brands -- such as LU, Tuc and Prince -- and operations and assets in more than 20 countries, including 32 manufacturing facilities.
"I'm also delighted that the Danone biscuit leadership team will be joining Kraft," added Khosla. "Their insights and expertise will be invaluable as we jointly develop our growth plans."
Georges Casala, formerly the head of Danone's biscuit business, will be joining Kraft as president, Kraft Biscuits Europe and will report directly to Khosla.
"I'm excited to be joining a company where biscuits is a global core business," said Casala. "There is tremendous potential to leverage growth synergies with Kraft by developing our combined brand 'jewels,' by expanding to new territories and by extending our biscuits brands together with Kraft's other strong categories."
From the December 3, 2007, Prepared Foods e-Flash