AB Foods snaps up Novartis food and drink business - Company News - Brief Article

Eurofood, Oct 10, 2002

UK food group Associated British Foods (ABF) has agreed to buy Novartis of Switzerland's food and beverage business for 272.5m [euro], subject to regulatory approval. The latter company has yet to find a buyer for its health food, slimming sports nutrition lines, including sports drink Isostar.

The deal includes food and beverage products Ovomaltine and Ovaltine drinks, the Caotina chocolate drink and Lacovo malt drink. Between them, they generated sales equalling 244m [euro] for their Swiss owner last year. They formed part of Novartis Health & Functional Food unit, which posted sales of 581m [euro]

The London-based ABF will acquire Novartis' food and beverage business in all international markets except the US and Puerto Rico, which are subject to separate licensing agreements, said Novartis.

The UK group will take over plants in Switzerland, Thailand, the Philippines, China and Australia.

The divestment, plans of which were originally announced in February this year will enable Novartis to concentrate on its healthcare activities, with pharmaceuticals at its core.

ABF, the maker of Twinings tea and Ryvita crispbreads, has annual sales in excess of 4.4bn [pounds sterling] (7bn [euro]) and employs some 34 000 people.

ABF is the British market leader in bread and sugar and brand leader in specialty teas, the brand leader in Australian bread, number one in low-calorie natural sweeteners in the US market, and world leader in enzymes for food and industrial uses.

It should be able to realise operating synergies from the deal and using its own established distribution network be able to strengthen sales of the brands around the world.