Kellogg to acquire controlling stake in Brazilian food company Parati
US-based cereal maker Kellogg has entered into an agreement to acquire Ritmo Investimentos, a controlling shareholder of Brazilian food group Parati Group.
The purchase price of the acquisition is about $429m and it will be an all-cash transaction.
The deal is expected to strengthen Kellogg's strategic priorities including expanding its presence in emerging markets.
Parati offers a range of regional brands including Parati, Pádua, Minueto, Zoo Cartoon and Hot Cracker biscuits.
Kellogg chairman and CEO John Bryant said: "With its outstanding portfolio of popular consumer brands, Parati Group is an excellent strategic fit for Kellogg and our business in Latin America.
"Brazil is the largest economy in Latin America and this acquisition will allow us to accelerate our growth and improve our margins in the region. This means more growth for the core Parati Group business and our well-loved Kellogg brands."
Employing 3,200 people, Parati has five distribution centers and two production facilities with room for expansion.
It serves about 60,000 customers directly, with a strong presence in small to medium retail stores in Brazil.
Kellogg Latin America president Maria Fernanda Mejia said: "The combination of Parati's portfolio and sales and distribution capabilities with Kellogg's global resources – including innovation expertise, extensive shopper insights and customer marketing strength – provides tremendous opportunity.
“Bringing our companies together enables us to expand our footprint in a rapidly growing market.”
Parati is the fourth acquisition for Kellogg in the emerging markets in the last two years.
The transaction is subject to customary closing conditions and is expected to close in late 2016.
In September 2015, Kellogg acquired Egypt's leading cereal company, Mass Food Group, for $50m, as part of its strategy to grow its presence in emerging markets.
Image: Kellogg to acquire controlling stake in Brazilian food company Parati. Photo courtesy of voraorn/FreeDigitalPhotos.net.