URC buys Snack Brands Australia for $461M

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LEADING snacks and beverage manufacturer Universal Robina Corp. (URC) has acquired Snack Brands Australia (SBA) for A$600 million (about $460.9 million) in a bid to expand its footprint in the Oceania region.

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In a disclosure to the Philippine Stock Exchange, URC said that its wholly owned offshore unit URC International Company Limited entered into a definitive agreement with Consolidated Snacks Pty Ltd (CSPL) on Wednesday to acquire 100 percent of CSPL’s shares for A$600 million in a cash-free, debt-free deal.

URC International will fund the transaction with long-term debt financing and other sources.

URC acquired CSPL from Toccata Securities Pty Ltd and Hopkins Securities Pty Ltd. The transaction has been approved by the boards of directors of both URC and CSPL but is still subject to the approval of the Australian Foreign Investment Review Board (FIRB).

The deal is expected to be closed on September 30.

Lance Gokongwei, URC chief executive officer, said the deal will give the company a foothold in the highly competitive Australian fast-moving consumer goods (FMCG) market and is seen to be synergistic to URC’s Griffin Foods venture since November 2014.

“URC in the past three years has started to look for strategic options on acquisitions or partnerships given the emerging competitive challenges being brought upon by the lifting of trade barriers and the attractiveness of the region where we operate. While we continue to push for innovation as an anchor to sustain our growth, the opportunity came at the right time to acquire a company like Snackbrands,” Gokongwei said.

SBA is the second largest player in the Australian salty snacks segment, cornering a third or 30 percent of the market, and is the company behind the brands Kettles, Thins, CC’s and Cheezels.

For his part, SBA CEO Paul Musgrave said: “SBA is delighted to be a part of the URC family moving forward. As our business has grown, we have begun to turn our eyes to new markets and new product segments to be able to leverage our portfolio of much loved brands. It was clear that a regional partnership would accelerate our plans in both these areas and the approach by URC could not have been better timed.”

CSPL is currently operating two manufacturing facilities in Sydney which are located in Smithfield and Blacktown. It has also invested significantly in automation and manufacturing capacity.

Outside of the Philippines, Gokongwei-owned URC has operations and distribution lines in the United States, Australia, New Zealand, Europe, Japan, Korea, Middle East, Southeast Asia and West Africa.

Under parent conglomerate JG Summit Holdings Inc., URC manufactures salt-flavored snacks, candies, chocolates, and ready-to-drink tea under the C2 green tea and Jack N’ Jill brands, and also manufactures coffee brands Cafe Puro and Nescafe.

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