Chipita Chief Executive Officer, Spyros Theodoropoulos
(Spyros Theodoropoulos, Chipita Chief Executive Officer)

Chipita gets acquired by US giant Mondelez

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Chicago-headquartered confectionery, food, and beverage company Mondelez International on Wednesday (May 26) announced an agreement for the acquisition of Athens-founded Chipita S.A., a leader in the bakery product and snack sector in central and eastern Europe, for around $2 billion.

Chipita was established in Greece in 1973. It has been operating outside Greece since 1996 by setting up production plants in Bulgaria, followed by Poland, Romania, Russia and Saudi Arabia and more recently Turkey, Malaysia, Mexico, India and Slovakia (2020). Since this period, Chipita also set up commercial offices in 11 countries – Czech Republic, Germany, Hungary, Serbia, Slovakia, Croatia, the Baltics, Georgia, Ukraine, Belarus and the UK. The company’s products include croissants, bagel chips, cake bars, biscuits and spreads.

Chipita generated approximately $580 million of revenue in 2020 and has been at the forefront of the development and growth in the sector across multiple countries driven by its strong innovation and manufacturing capabilities.

Dirk Van de Put, Chairman & CEO of Mondelēz International
(Dirk Van de Put, Chairman & CEO of Mondelēz International)

“Welcoming Chipita S.A.’s delicious pastry products into the Mondelez International family advances our strategy to become the global leader in broader snacking,” said Dirk Van de Put, Chairman & CEO of Mondelēz International. “Their iconic brands and significant scale across so many attractive geographies make them a strong strategic complement to our existing portfolio and future growth ambitions in Europe and beyond.”

Chipita S.A.’s products, produced in 13 manufacturing plants, and delivered in more than 50 countries,
either directly or indirectly through strategic partnerships, reach two billion consumers. The company employs about 5,100 workers. The acquisition will enable the Mondelēz International business to offer a broad bakery portfolio – biscuits, cake and now pastry – meeting growing consumer demand for this segment, the American multinational said.

Commenting on the acquisition, Chipita S.A.’s Chief Executive Officer, Spyros Theodoropoulos, stated:

“Chipita, for more than 40 years, based on quality and innovation created a new category of snacks loved by consumers internationally. I am certain that the acquisition of Chipita by Mondelēz International, one of the world’s leading snacking companies, will create new prospects for its people and products.”

Paris-based Rothschild & Co. , one of the world’s largest independent financial advisory groups, advised Chipita on the deal.

Mondelez plans to fund the purchase price of approximately $2 billion, which is subject to certain closing purchase price adjustments, through a combination of new debt issuance and existing cash.

The multinational expects the transaction to be immediately accretive to earnings per share from closing. The transaction is subject to relevant antitrust approvals and closing conditions. The perimeter of the transaction does not include P.G. Nikas S.A., a Greek meat-processing business, or Chipita S.A.’s minority interest in Britchip, its Indian joint venture.

Chipita commercial structure
(Chipita Commercial Structure Data & Graphics: Chipita Official Website)

The acquisition of Chipita S.A. builds on Mondelez’s continued expansion into fast-growing snacking segments. So far in 2021, the American company has acquired UK’s Grenade, a leading performance nutrition company, Gourmet Food Holdings, an Australian company in the premium biscuit and cracker category; and Hu, a well-being snacking company in the United States.

In a late April call with investment analysts, Mr. Van de Put cast doubt as to whether Mondelez would continue its buying spree anytime soon.

“If there would be a larger acquisition that would provide us the opportunity to get bigger in snacking and/or get an accelerated growth rate, we’re certainly open to it,” he said. “But it’s just very difficult to find and we’re hesitant…. (It is) much more difficult to find the right sizable acquisitions.”

Mondelez International,  a global leader in biscuits, crackers, chocolate and other confectionery products,has an annual revenue of about $26 billion and operates in approximately 160 countries. The company is a member of the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Sustainability Index. Mondelez’s stock has increased by 9% for the year to date.