Dive Brief:
- Mondelez announced Friday an agreement to purchasethe license forCadbury-branded cookie biscuits from Burton's Biscuit Company, subject to regulatory approval. Financial details were not disclosed.
- Ownership of this license would enable Mondelez to manufacture, market and sell Cadbury biscuitsaround the world, including in North America, the UK, France, Ireland and Saudi Arabia.
- Both companies have agreed to a co-manufacturing arrangement in which Burton's factories and employees will continue producing Cadbury-branded biscuits.
Dive Insight:
"The transaction will help us to unify and expand our globalCadburybiscuits portfolio in key markets and enable us to explore delicious new products by using the best of our chocolate and biscuit innovation platforms," Hubert Weber, executive vice president and president of Mondelez Europe, said in a statement.
The announcement is Mondelez's first attempted deal sinceHershey rejected the company's $23 billion takeover offerin late June. Still, Mondelez hasn't slowed its global expansion, having announced last month it would bebringing its Milka chocolate brand to China, a $2.8 billion chocolate market. Chocolate and cookie biscuits have innovation and synergistic opportunities Mondelez is now better positioned to explore worldwide.
The Cadbury license could help Mondelez revive sales, which have been falling consistently, includinga 17.7% decline in the most recent quarterand a13.5% dip in full-year 2015 sales. Organic net revenue growth came in at 1.5% last quarter, which demonstrates continued global demand for Mondelez's products. Thedivestment of Mondelez's coffee businessto create Jacobs Douwe Egberts has accounted for some of the lost revenue.
Though neither company disclosed the deal's financial details, U.K. media reports last monthestimated the deal's value at about £200 million($260 million), The Wall Street Journal reported.
