Nestlé to buy Australia's Uncle Tobys cereals, snack business
Tobys cereal, soups and nutritious snacks brand from Burns Philp
for A$890 million (€523.2m) to expand its range of healthier foods
in Australia.
The sale price is 11.3 times Uncle Tobys' 2005 EBITDA of A$79 million, Nestle said.
Uncle Tobys' cereal unit - which makes up 40 per cent of its total A$400 million sales - will become part of Cereal Partners Worldwide, Nestle's breakfast food joint venture with General Mills.
This will make it the number two player in the Australian cereals market, one of the largest in the world, said the Swiss company on Tuesday. It also provides a manufacturing facility for Cereal Partners in Australia.
Nestle says the Uncle Tobys brand is iconic in the Australian market with unparalleled respect in the areas of nutrition and vitality.
The brand gives Nestlé Australia the number one position in nutritious snacks and it will also become number two in instant soups under the Country Cup brand.
"Both categories are strategically important in the group's drive towards nutrition, health and wellness," said Nestle.
In addition, the acquisition offers "a strong opportunity for synergies, both in terms of cost, but also through growing the Uncle Tobys brands in channels where Nestlé has particular strength, including impulse", said the company.
Nestle will also acquire rights to the Uncle Tobys brand in New Zealand but it does not include the company's salty and wrapped snacks unit in that market, said Burns Philp said in a statement to the Australian Stock Exchange.
"Burns Philp continues to assess its strategic options for this business," it said.Nestlé Australia had total sales of more than A$2 billion in 2005.
