Under the agreement, Ferrero’s Belgian holding CTH will acquire Fox’s branded and retailer own-brand, including M&S, biscuit business, along with the production plants in Batley and Kirkham from Northern Food Grocery Group Limited, a subsidiary of Boparan Holdings.
2SFG will retain its Uttoxeter plant, which produces own-label biscuits for major retailers.
Ferrero has embarked on an aggressive expansion plan over the past five years under the leadership of Giovanni Ferrero, son of Michele, creator of the popular Nutella chocolate and hazelnut spread.
The acquisition of Fox’s – along with the earlier procurements of Biscuits Delacre and Kelsen Group – places the Italian giant as the second largest chocolate and confectionery business in the global sweet biscuit market.
Ferrero’s turnover has risen above €11bn through its acquisition spree and expansion in other categories outside chocolate.
Right new home at the right time
According to Ranjit Singh, president of Boparan Holdings, Fox’s – a 167-year old company that produces a wide range of British favourites such as Rocky Bars, Crunch Creams and Party Rings – has found “the right new home, at the right time and for the right value." The scent of a sale had attracted interest from other big biscuit hitters, including Burton's Biscuits and Biscuit International.
“Fox’s Biscuits has always been an attractive brand and as one of only two major independent biscuit makers in the UK, it is a prized asset in this market,” said Singh.
“This sale represents another significant deal for us, underlining our commitment to our business turnaround. It strengthens our balance sheet even further and shows we are following through with our promises to focus on our key strengths.”
2SFG – owned by Boparan – inherited Fox’s Biscuits in 2011 when it bought Northern Foods for £342m. The Fox’s divestiture will allow it to focus on becoming more poultry-centric.
Ronald Kers, CEO of Boparan Holdings, said, “This sale is in line with our strategy and is further good news as we build on two years of strong turnaround momentum and continue to focus on our core business. It strengthens our liquidity position and reduces our leverage ahead of our planned refinance of the business.
“We believe the sale to Ferrero is not only beneficial for 2 Sisters Food Group, but it means a positive future for the Fox’s brand with an owner who has a compatible culture and a global reputation for high-quality branded chocolate and biscuit products.”
Ferrero expects to finalise the transaction in the next few months, subject to customary closing conditions and regulatory approvals.
Investment bank Fieldfisher and Houlihan Lokey served as legal and financial advisors to CTH.