Unilever PLC - Acquisition
October 20 1997 - 8:00AM
UK Regulatory
RNS No 3888u
UNILEVER PLC & NV
20th October 1997
UNILEVER TO ACQUIRE PHILIP MORRIS BRAZILIAN ICE CREAM
BUSINESS FOR $930 MILLION
-- Deal Reflects Regional and Product Category Focus--
Unilever is to acquire Kibon, Brazil's largest ice cream
business, from Philip Morris, for $930 million (#573m approx).
Kibon is a significant acquisition in a Unilever priority
product category and key region.
Acquisition of Kibon will give Unilever leadership of the
fast growing Latin America ice cream market.
Unilever plans to make Kibon its ice cream innovation
centre for all Latin America.
Unilever chairman, Niall FitzGerald, said: "This is an
important acquisition for Unilever. It opens up good growth
opportunities that will lead to sustained value growth."
UNILEVER TO ACQUIRE PHILIP MORRIS BRAZILIAN ICE CREAM
BUSINESS FOR $930 MILLION
-- Deal Reflects Regional and Product Category Focus--
Unilever has agreed to acquire Kibon, the Brazilian ice cream
business of Philip Morris, for a cash consideration of $930
million (#573m approx). The deal includes the acquisition of
the Philip Morris share of a 50-50 joint venture ice cream
business, Sorvane, based in north east Brazil.
Kibon had net sales of $332 million (#204m approx) and an
operating profit of $75 million (#46m approx) for the year
ended October 1996. Kibon's net asset value at July 31 1997
was $104 million (#64m approx). Sorvane had total net sales
of $68million (#42m approx) for the year ended October 1996.
The completion of the transaction is subject to various
Central Bank of Brazil procedures.
Kibon holds some 60 per cent of the Brazilian ice cream market
and with its acquisition Unilever will secure overall
leadership across the total Latin America ice cream market.
Unilever chairman, Niall FitzGerald, said: "This is an
important acquisition for Unilever. It opens up good growth
opportunities that will lead to sustained value growth.
"It is further evidence of our determination to develop and
grow our priority product categories in the developing and
emerging markets. This acquisition will significantly
increase our foods interests in Latin America and will add an
attractive market to our worldwide ice cream operations. We
are delighted with the deal," he said.
Kibon has its head office and main factory in Sao Paulo and a
production unit in Rio de Janeiro. Together they employ some
2,300 people manufacturing and marketing brands which have
become household names to generations of Brazilians. Today,
its leading brands in the impulse/novelty and take-home
segments include "Fruttare", "Chicabon", "Kibonbon",
"Frutilly" and "Ao Leite" -- all marketed under the Kibon
house brand.
The Latin American ice cream market is estimated at $1.6
billion (#985m) and over the next decade Unilever expects it
to double in size. This acquisition offers good opportunities
for the development of Unilever's business and in Kibon it has
the leader in the region's single largest market with a
population of some 160 million.
Unilever intends to develop the Kibon business, drawing on the
expertise of its strong management team and supporting them
with state of the art technology. Kibon's product range will
be strengthened and supplemented by some of Unilever's
international ice cream brands such as Magnum, Cornetto and
Viennetta.
Unilever will establish Kibon as one of its international ice
cream innovation centres and as part of the global network of
Unilever ice cream businesses. It will provide vital support
for the growth of Unilever's ice cream interests across Latin
America.
Unilever has been in Brazil since 1929 and its Gessy Lever
company is the country's 10th largest business. It is the
market leader in a number of home and personal care and foods
categories. Last year Unilever's total Latin American sales
were #3.3 billion and its operating profit was #317 million.
October 20 1997
Attached: Background Notes
Unilever Brazilian Ice Cream Acquisition - Background Notes
Unilever defines its Latin America region as: Mexico,
the Caribbean and South and Central America. It has
aggressively grown its ice cream interests within the region
since its entry to Chile in 1993. Today, through a
combination of acquisition and greenfield activity, it has ice
cream businesses in 12 countries in the region, including
Brazil. (See Below)
Worldwide, Unilever sells its ice cream in 85 countries.
With sales of approximately $6 billion, it is the undisputed
world leader and is close to twice the size of its nearest
competitor.
Ice Cream is one of Unilever's "starred" product
categories. These categories offer the potential to create
exceptional growth in value worldwide. The others are:
yellow fats (margarines), tea-based beverages, laundry,
personal wash, mass skin and prestige products.
South Latin America has been identified by Unilever as
one of the five sub-regions for priority attention and
investment. The others are Central and Eastern Europe, India,
China and South East Asia. Over the past three years, total
turnover from these priority sub-regions has increased by
nearly 60 per cent and now accounts for just under 20 per cent
of Unilever's total sales.
Unilever's Ice Cream Expansion - Latin America
Country: Entry: Route:
Chile 1993 Acquisition
Venezuela 1994 Acquisition
Colombia 1995 Acquisition
Uruguay 1995/7 Greenfield/Acquisition
Dom. Republic 1995 Greenfield
Peru 1996 Greenfield
Bolivia 1996 Greenfield
C.America 1996/7 Greenfield/Acquisition
Ecuador 1996 Acquisition
Mexico 1997 Acquisition
Argentina 1997 Acquisition
October 20 1997
END
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