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Food and beverage industry expecting strong deal activity in 2017

Corporate activity in the food and beverage industry was unexpectedly high in December 2016 and January 2017 with several substantial transactions announced during this period.

Acquisitions announced

The standout transaction in the quarter was the acquisition of the Mondelêz Australia Grocery Business by Bega Cheese for $460 million. The Mondelêz grocery business includes iconic Australian brands such as Vegemite, ZoOSh salad dressing and sauces and Bonox spreads. The Mondelêz grocery business has an estimated 31 per cent share of the $550 million spreads category in Australia.

The baked goods and prepared meals sector saw two transactions with Temptation Bakeries and New Zealand-based Leader Group both sold.

Raphael Geminder, the chairman of Pact Group, acquired 43.5 per cent of Green’s Foods from CVC for approximately $24 million. Geminder is now the largest shareholder in Green’s Foods.

Costa Group has acquired the Avocado Ridge orchards and packing operations in central Queensland in a joint venture with Macquarie Agricultural Funds Management.

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Listings on the ASX

Murray River Organics was the most substantial IPO, listing on the ASX on 16 December 2016 after raising $35 million as part of the IPO process.

2017 is shaping up to be a dynamic year across the food and beverage industry with strong interest in the industry from both trade investors and financial investors.

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[Ben van der Westhuizen and David Baveystock are directors of Comet Line Consulting, an advisory business that specialises in acquisitions and divestments within the Australian food & beverage industry]

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