Acquisitions have played a key role in shaping Mondelez International, Inc.’s MDLZ growth story. Keeping in these lines, the company concluded the previously announced buyout of a considerable majority stake in Give & Co. The buyout was first announced on Feb 25. Per the deal, the acquired company will operate as a separate business from its existing headquarters in Toronto, Ontario, Canada. Moreover, Mondelez will provide customer and channel insights along with procurement and marketing resources to aid growth.
Being a pioneer in fully-finished sweet baked goods, Give & Go offers brownies, cupcakes, pastries and muffins as well as owns well-known brands like two-bite and Create-A-Treat. The inclusion of the above-mentioned products and brands is likely to strengthen Mondelez’s portfolio, which already includes global and local brands — Oreo, Cadbury, Milka and belVita along with Tate’s and Perfect Snacks.
Certainly, Give & Go’s fast-growing in-store bakery channel is likely to help the company further expand its snacking business. Apart from this, Mondelez acquired a minority stake in Perfect Snacks in July 2019. Perfect Snacks is a leader in the fast-growing refrigerated nutrition bars space, which offers original refrigerated protein bars as well as organic, non-GMO, nut-butter-based protein bars and bites. In April 2019, Mondelez invested in Hu Master Holdings — a renowned company offering high-quality snacking items. By collaborating with Hu Master, the company expects to make wellness-oriented snacks.
Further, Mondelez acquired a premium cookie brand, Tate’s Bake Shop, for $500 million in June 2018. In the same year, the company launched an innovation hub, SnackFutures, under which it plans to continue innovating products. In January 2018, the company teamed up with Post Consumer Brands, a business unit of Post Holdings POST, to create two new cookie-inspired breakfast cereals. Other notable buyouts of the company include 13.8% ownership in the Keurig Dr Pepper business (in July 2018), Cadbury in 2010 and LU biscuit business in 2007.
These buyouts significantly expanded Mondelez’s routes-to-market globally, especially in emerging markets. We believe that the company’s focus on undertaking acquisitions to gain scale in its categories and distribution capabilities bode well.
Shares of this Zacks Rank #3 (Hold) company have dropped 10.2% in the past three months compared with the industry’s decline of 19.3%.
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