Barry Callebaut to acquire Petra Foods’ cocoa ingredients division

Swiss chocolate products manufacturer Barry Callebaut has entered into an agreement to acquire the cocoa ingredients business of Singapore-based Petra Foods for $950m.

The proposed acquisition will expand Barry Callebaut’s cocoa sourcing and processing capabilities, and strengthen its current and future outsourcing and partnership agreements.

Barry Callebaut noted that the integration of the division into the company will make it the largest cocoa processor in the world.

Petra Foods’ cocoa ingredients division is a leading cocoa products supplier in Asia and it has a sales volume of 265,000t globally.

The division has seven processing facilities in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France, with total bean grinding capacity of 405,000t, and sales offices in Singapore, the Netherlands and the US.

It has annual sales of CHF1.1bn ($1.17bn) and employs 1,700 people.

The deal includes a long-term agreement under which Barry Callebaut will supply Petra Foods’ branded consumer division with cocoa products, covering 75% of its total needs.

Barry Callebaut chief executive officer Juergen Steinemann said that the acquisition will support the company’s growth strategy.

"A stronger integrated position in sustainable cocoa sourcing and processing is important to keep growing our chocolate business over-proportionally, especially in emerging markets," Steinemann added.

Barry Callebaut expects the acquisition to increase its sales in the emerging markets of Latin America and Asia by 65%; provide it with a valuable market knowledge base in Asia; expand its presence in cost-competitive production countries; and create a second strong sourcing base in Asia, in addition to its existing sourcing base in West Africa.

The transaction, which is on a cash/debt-free basis, is expected to be completed in summer 2013.

Barry Callebaut plans to fund the transaction through bank loans.

The deal is subject to clearance by Petra Foods’ shareholders as well as regulatory authorities and is expected to be accretive to Barry Callebaut’s earnings per share in the fiscal year 2014/15.

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Image: The acquisition of Petra Foods’ cocoa ingredients division will expand Barry Callebaut’s cocoa sourcing and processing capabilities and strengthen its outsourcing and partnership agreements. Photo courtesy of Barry Callebaut.