Suchard Bows Out of Bidding for Rowntree
Jacobs Suchard AG conceded defeat on Friday in the takeover battle for British confectioner Rowntree PLC to Swiss foods giant Nestle SA, which now will displace Suchard as the world’s second-largest confectioner.
But Suchard, which agreed to sell its 28.4% stake in Rowntree to Nestle for 690 million pounds ($1.2 billion), is walking away with a hefty profit, which analysts estimate at more than 200 million pounds.
Suchard is now expected to turn its attention to Cadbury Schweppes PLC, the British confectioner and soft-drink company in which General Cinema Corp. of the United States holds an 18.4% stake.
On Thursday, Rowntree, the York, England-based manufacturer of candies such as the Kit Kat bar, announced that its board had accepted a sweetened Nestle offer of 2.55 billion pounds ($4.48 billion).
Suchard said it would allow its own rival offer for Rowntree of 2.32 billion pounds to lapse, and Nestle later confirmed that it had purchased Suchard’s entire stake. That gives Nestle about 51% of all Rowntree’s stock.
Suchard’s decision to bow out gave control of Rowntree to Nestle, ending a months-long takeover battle that created a huge controversy in Britain and was dubbed the “candy bar wars.”
Ranks No. 2 in World
Critics have objected to the purchase of a 263-year-old British company by a foreign one and have feared that an acquisition would result in layoffs.
The merger of Rowntree into Nestle will create a confectioner that ranks only behind Mars Inc. of the United States, the world’s biggest confectioner. Suchard falls to third place.
Zurich, Switzerland-based Suchard, which has interests in chocolate and coffee, said it agreed to sell to Nestle its 64.2 million Rowntree shares at Nestle’s offer price.
Suchard said the increased Nestle offer was higher than the maximum price it could afford.
Nestle, based in Vevey, Switzerland, had raised its offer 21% from 2.1 billion pounds, 13% above Suchard’s offer.
The Rowntree takeover battle began April 13 when Suchard, which makes the Toblerone chocolate bar, snapped up nearly 15% of Rowntree’s shares.
