US snacks giant Mondelez in talks with AVI in bid for acquisition of Snackworks
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SOUTH African food producer and fashion retailer AVI’s shares slipped in intraday trade yesterday after it said discussions with US snacks and confectionery giant Mondelez International had progressed regarding the potential acquisition of its Snackworks division.
By 4.10pm the shares were down 5.76 percent to R81.99. The shares later closed at R81 on the JSE yesterday.
AVI’s Snackworks division consists of popular brands such as Bakers, Baumann’s, Pyotts and Provita brands, which are an iconic part of South Africa’s biscuit history.
The Mondelez portfolio of brands includes Cadbury Dairy Milk and Oreo biscuits, among others.
The talks, if successfully concluded, might have an effect on the price of the company’s securities, it said. AVi first alerted the market that it was in talks on September 16 and again on October 29.
“Bearing in mind that there can be no certainty that an agreement will be reached, AVI shareholders are advised to continue exercising caution when dealing in their AVI securities until a further announcement is made,” AVI said.
In AVI’s annual report in June, it said Snackworks revenue of R4.27 billion was 2.2 percent lower than the prior year.
The impact of higher raw material costs and lower volumes had not fully recovered in an environment characterised by constrained demand and reducing disposable income, and consequently profitability in biscuits decreased.
BUSINESS REPORT ONLINE