Image Source: Baking Business
Cadbury, the owner of the British chocolate giant, has announced the purchase of Clif Bar & Company, a US energy bar company, for $2.9 billion (£2.4 billion).
The transaction would boost Mondelez International’s efforts to “lead the future of snacking,” according to the company, which also owns Oreo, Toblerone, and Milka. According to the company, Clif’s goods will continue to be manufactured at the company’s facilities in Idaho and Indiana.
Mondelez issued a warning in March about the impact of increased production costs.
The American confectionary company said in a statement on Monday that the takeover will enhance the value of its snack bar business to over $1 billion. It also stated that once the acquisition is completed later this year, it will continue to operate Clif’s operations from Emeryville, California, where the company is headquartered.
Mondelez’s chairman and chief executive, Dirk Van de Put, spoke about the transaction and welcomed Cliff Bar & Company’s iconic brands and enthusiastic workers into the Mondelez family. He regarded the purchase as exhilarating.
Dirk continued, “as we continue to scale our high-growth snack bar business,” the deal further promotes the company’s mission to lead the future of snacking by winning in chocolate, biscuits, and baked snacks.
According to the company’s website, Gary Erickson came up with the idea for an energy bar while doing a 175-mile bike ride three decades ago. The pub was named after Mr. Erickson’s father and “childhood hero” Clifford and opened “after endless hours in mom’s kitchen.”
Mondelez was “the perfect partner at the right time to support Clif in our next chapter of growth,” according to Clif CEO Sally Grimes.
Last year, Mondelez, which also owns Daim, Ritz, and Belvita, recorded net revenue of about $29 billion.
However, like many of its competitors, it was suffering rising expenses and announced in March that the size of Cadbury Dairy Milk sharing bars would be reduced by 10%.
It lowered the size of the bars from 200g to 180g while keeping the pricing the same for clients.
“We try to absorb costs wherever we can,” a Mondelez spokesperson said. “However, in this difficult environment, we’ve had to make the decision to slightly reduce the weight of our medium Cadbury Dairy Milk bars for the first time since 2012.”
Nestle, the Swiss food behemoth, warned in April that growing ingredient costs would force it to raise the pricing of its products.
In the first three months of the year, the creator of KitKats and Nesquik increased its pricing by more than 5%.
Nestle CEO Mark Schneider indicated that “additional pricing and mitigation steps throughout the course of the year” will be needed when expenses rise.
