Cadbury bids for small Japanese sweets maker
Cadbury Schweppes Plc will launch a $US111 million ($NZ148.93 million) friendly takeover bid for small Japanese candy maker Sansei Foods Co Ltd to help it expand in the world's fourth-biggest market for sweets.
Cadbury, the world's largest confectionery group and maker of Dairy Milk chocolate, said it would pay 2750 yen ($NZ30.04) for each Sansei Foods share in a tender offer from today to July 19, placing a 66 per cent premium on Monday's closing price of 1651 yen.
Sansei Foods is strong in low calorie and anti-cavity candies. It booked a net profit of 634 million yen on sales of 6.3 billion yen in the last business year to October 2006.
Through a local subsidiary, Cadbury said it would aim to buy at least 66.67 per cent of Sansei's outstanding stock and would buy all shares tendered above that amount. Purchasing the entire company would cost it about 13.75 billion yen.
The deal has the blessing of Sansei's directors and big shareholders who own 46 per cent of its stock, Cadbury said.
Cadbury has been able to take 18 per cent of Japan's 180 billion yen gum market, helped by its acquisition of US-based gum maker Adams in 2003. That puts it in the No 2 spot in Japan behind industry leader Lotte.
But it is relatively weak in candy, controlling only 3 per cent of the 270 billion yen market. Acquiring Sansei, which sells sugar-free hard candy under the Teicalo and Xylicrystal brands, would boost its share to 7 per cent.
Cadbury Japan President Yukari Inoue told a news conference the company would aim to secure a solid footing in the candy business before taking a more aggressive stance on the 410 billion yen chocolate market.
"First we will aim to grab top share of the candy market. After that we will think about chocolate," he said.
In addition to helping bolster its presence in Japan, Cadbury said it would look to take Sansei's products overseas.
According to a Cadbury spokeswoman, Japan is the world's fourth-largest market for sweets, including gum, candy and chocolate. The top three markets are the United States, UK and Germany.