Sos Arana diversifies with acquisition of biscuit maker - Brief Article

Eurofood, Feb 17, 2000

Just a week or so after unveiling plans to diversify into a new business area, Spanish rice group Sos Arana has done just that with the purchase of a 94.15% stake in the biscuit maker Cuetara. The deal also includes a stake in the biscuit group's Portuguese subsidiary Bogal Bolanchas. Until now Cuetara has been a family-owned company, with two different branches of the family holding 62% and 38% respectively in the eponymous firm. Virtually all the family shareholders have agreed to sell their shares to Sos Arana, which plans to maintain the existing management team.

Cuetara is the leading biscuit brand in Spain with an 18.6% share of the market, ten points ahead of its nearest rival. Bogal has a similar position in Portugal, where its share is 18.4%. Cuetara posted sales of Pta21bn (??126m) in 1999, up 6.1%, while its net profits reached Ptal.3bn. Combined Sos Arana and Cuetara sales for 2000 are expected to top Pta43bn, with the biscuit arm accounting for nearly 50% of total sales. Cuetara will diversify into a number of new markets via the Sos Arana international distribution network.

MAIDEN VOYAGE OUTSIDE THE RICE SECTOR

The biscuit maker is the first acquisition outside the rice sector for Sos Arana, which has grown rapidly since its formation in 1995 via the merger of Arroz Sos and Grupo Arana. The same year as the merger, the newly formed group signed a joint venture agreement with the Mario Coelho company to form a rice subsidiary in Portugal, which just last December acquired the Sipa company there for Pta3.4bn (see Eurofood, 16 December 1999, p7). In June 1995, Sos Arana took a 33% stake in a rice processor in French Guyana, while a year later it formed a joint venture in Moscow, took a stake in a Paraguayan rice group and bought the leading Mexican processor Arrocera del Tropico. In June 1998, it bought a 3.26% stake in Italy's Parboriz, and it is currently studying possible acquisitions in Greece, France and Italy.