Cloetta, LEAF announce company merger

Swedish confectionery companies Cloetta and LEAF have announced the merger of their companies to establish a strong presence in the Nordic region and in Italy and the Netherlands.

The combined company, which will run under Cloetta, will have pro forma net sales of SEK 5.7bn ($821m) and recurring EBITA of SEK 666m ($96m), managing a range of iconic brands, including Kexchoklad, Läkerol, Polly, Ahlgrens bilar, Plopp, Malaco and Cloetta in Scandinavia, Jenkki in Finland, Sperlari and Saila in Italy and Red Band and Sportlife in the Netherlands.

Under the agreement, Cloetta will use loans, cash from CVC and Nordic Capital to pay SEK1.05bn ($151m) to LEAF and in return issue shares in the new company to the two private investment firms.

The new Cloetta will also assume LEAF’s current debt of SEK2.8bn ($403m).

LEAF CEO Bengt Baron said the new company will offer a full range of strong brands and a very strong route to market in the Nordic countries, as well as in Italy and in the Netherlands.

"In an industry where the brand is nearly as important as the taste of the product, this transaction makes both industrial and strategic sense," Baron added.

Following the deal, Malfors Promotor, the leading shareholder of Cloetta, will hold 22% of the shares and 39.9 % of the votes in the new company Nordic Capital and CVC will hold 24.6% and 33% of the shares and 18.9% and 25.4% of the votes, respectively.

The transaction, which is subject to clearance from the relevant competition authorities and shareholder approval in Cloetta, is expected to close in February 2012.