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Unilever Chief Marketing Officer Resigns
2/9/2010

Unilever Chief Marketing Officer Resigns

Unilever Chief Marketing Officer Resigns

Simon Clift is stepping down as the chief marketing officer of Unilever in the next few months, the company has confirmed.

Clift is a 30-year veteran of Unilever. He held several senior positions -- including president of marketing, chairman of personal care products in Latin America and group vp, personal care -- before rising to his post as the company's first CMO in 2008.

But now, nearly three decades after he first joined the multinational packaged goods company, Clift is retiring to “spend more time with his family in Brazil and pursue other creative opportunities,” Unilever rep Anita Larsen said.

During his time at Unilever, Clift helped develop global marketing strategies for brand power players like Dove. (The beauty brand’s “Campaign for Real Beauty,” for instance, was developed under his tenure.)

The announcement follows Unilever’s decision to retain its U.S. media planning and buying duties with MindShare after a seven-month review.

Unilever has not yet announced plans for a replacement or search for a new CMO.
Cadbury’s Stitzer, Carr to Leave After Kraft Buys Candy Maker
2/3/2010

Cadbury’s Stitzer, Carr to Leave After Kraft Buys Candy Maker

Cadbury’s Stitzer, Carr to Leave After Kraft Buys Candy Maker

Cadbury Plc, the U.K. confectioner being bought by Kraft Foods Inc., said Chief Executive Officer Todd Stitzer and Chairman Roger Carr will leave the company after the U.S. food maker declared its offer unconditional.

Chief Financial Officer Andrew Bonfield will also stand down, Cadbury said today. Stitzer said in a statement that he will “be taking some time out with my family to consider my future options” after 27 years at the candy maker.

Carr and Stitzer led a five-month campaign against Kraft’s takeover plan, forcing the U.S. company to raise its offer to 11.7 billion pounds ($18.6 billion) to gain control. Kraft yesterday said 72 percent of Cadbury shares were tendered by holders, more than the 50 percent plus one share it required.

“The past few months have been an intense and difficult time and I would also like to thank all those who helped show the true value of Cadbury through a spirited bid defence,” Stitzer, 57, said in the statement. “By any set of business standards we have achieved great things.”

Carr said Cadbury’s defense, which highlighted the company’s potential in fast-growing emerging markets and more ambitious sales and profitability targets, had “delivered substantial value to shareholders” through the higher offer.

“In handing over to Irene Rosenfeld I wish her the very best as she takes on responsibility for continuing to build and develop what is indisputably one of the world’s greatest brands,” Carr, 63, said in a separate statement.

Rosenfeld, Kraft’s chief executive officer, is in London this week to hold meetings with Cadbury management and last night met U.K. Business Secretary Peter Mandelson.

The effective date of the three resignations is still to be determined, Cadbury said. Stitzer “will remain at Cadbury for some time to help with the integration with Kraft,” Cadbury spokesman Trevor Datson said by telephone.
Novartis taps Jimenez as CEO
1/26/2010

Novartis taps Jimenez as CEO

Drugs chief Jimenez replaces long-serving CEO Vasella

Novartis AG handed drugs head Joe Jimenez its top job on Tuesday with a mission to guide the Swiss drugmaker through ever-increasing competition to its key medicines.

The chatty 50-year-old American steps up after just over two years running Novartis's dominant drugs unit and faces a tough industry landscape as more blockbuster medicines lose patent protection and the sector struggles to generate new products.

He takes over from Swiss Daniel Vasella, a medical doctor and the longest-serving CEO among big European drug companies, who steps down on Feb. 1 after overseeing the acquisition of U.S. eyecare group Alcon Inc.

Vasella will remain as chairman.

"One thing we are aligned on is the strategy of the company, which is ... one of focused diversification," Jimenez told Reuters. "We both believe that the portfolio now is broadly right to help us grow into the future so I don't anticipate seeing significant changes there.

"I'm going to step back and think through how we're going to set the agenda for the next few years."

The departure of Vasella, who headed Novartis since the merger that created it 14 years ago, marks the completion of a changing guard at the top of the European industry after rivals GlaxoSmithKline, Sanofi-Aventis, AstraZeneca and Roche all brought in new CEOs.

Novartis Chief Operating Officer Joerg Reinhardt, who had been tipped as a possible successor to Vasella, will leave the company and his position will disappear.

Jimenez joined Novartis's consumer health unit in 2007 and soon took over the pharmaceuticals business, overseeing the progression of several promising new medicines including multiple sclerosis pill FTY720, or Gilenia, and cancer drug Afinitor.

His appointment at the head of a slimmed-down executive board came as the company reported a 54 percent rise in fourth-quarter net profit to $2.3 billion, helped by sales of its H1N1 swine flu vaccines -- not far from analyst expectations of a 53 percent jump to $2.4 billion.

Novartis shares rose 1.5 percent to 56.50 Swiss francs by 1030 GMT, outperforming a slightly stronger DJ Stoxx European healthcare sector .SXDP.

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"We see this as positive, placing a well respected progressive thinker as CEO," Deutsche Bank analysts said in a note. "Together with new CFO Jon Symonds we expect Jimenez to tackle pharma costs."

Shareholder group Ethos welcomed Novartis's decision to give shareholders a vote on executive pay, a hot topic during tight economic times and particularly for the drugmaker as Vasella's salary of over 20 million Swiss francs ($19 million) often draws criticism from the press and investors.

Novartis has agreed to buy a majority of Alcon from Nestle SA, using the acquisition to insulate against losing exclusivity on treatments like top-selling blood pressure drug Diovan, and has since come under fire for its lowball offer to minority shareholders.

Jimenez said he was happy with the current line up of new drugs and wide spread of the business into areas such as emerging markets and eyecare, which could all help offset lost Diovan sales when it loses patent protection in 2012.

The group still considered its Alcon offer -- originally worth $11.2 billion but dependent on share price moves -- as fair, Vasella said. Novartis has had no negative feedback from its own shareholders on the Alcon deal, said Vasella.

Novartis expects group sales to grow at a mid-single-digit percentage rate this year, but said profit was difficult to predict given the Alcon deal.

Sector investors will be closely eyeing results from another diversified healthcare group, Johnson & Johnson, due later on Tuesday, for more clues on whether tapping new markets away from prescription medicines is helping some drugmakers.

Novartis trades at a premium to GlaxoSmithKline, AstraZeneca and Sanofi-Aventis thanks to promising new drugs such as multiple sclerosis pill FTY720 and a broad business base, but lags Swiss rival Roche.
Del Monte CEO Richard Wolford will lean GMA board
1/25/2010

Del Monte CEO Richard Wolford will lean GMA board

Del Monte CEO Richard Wolford will lean GMA board

The Grocery Manufacturers Association (GMA) has elected Del Monte Foods chairman, president and CEO Richard G. Wolford chairman of the Washington-based organization’s board of directors. Wolford will serve a two-year term.

“In this leadership role, GMA and the larger CPG industry will benefit greatly from Rick’s leadership, his proven business acumen and his commitment to serving the consumer,” said association president and CEO Pamela G. Bailey.

Wolford was previously the group’s vice chairman of the board of directors and chairman of its Industry Affairs Council. His food industry career began in 1967, when he joined the finance department at Dole Foods. Rising through the ranks, he became president of Dole Packaged Foods in 1982 and stayed with the company through 1987. Wolford then worked with a group of venture capital investors to identify and evaluate acquisition opportunities, and, as CEO of the acquired companies, led the strategies to maximize each company’s performance. In collaboration with a private equity partnership, Wolford headed the acquisition of San Francisco-based Del Monte Foods in 1997, became the company’s CEO and was elected chairman of the board in May 2000.

“For more than a century, GMA has been the leading advocate for its member companies, bringing the industry together as one voice, to develop innovative and responsible solutions that help us serve our consumers better than ever before,” said Wolford, who succeeds Campbell Soup Co. president and CEO Douglas R. Conant as the association’s chairman.

GMA additionally elected four new board members: Coca-Cola Co. president, North American Group J. Alexander M. “Sandy” Douglas Jr.; Bush Brothers & Co. president and CEO Tom Ferriter; Procter & Gamble group VP, North America Melanie Healey; and Diamond Foods, Inc. president, CEO and director Michael Mendes.
Cadbury Accepts Fresh Kraft Offer
1/19/2010

Cadbury Accepts Fresh Kraft Offer

Cadbury Accepts Fresh Kraft Offer

Kraft Foods Inc. on Tuesday clinched a deal to acquire Cadbury PLC for £11.9 billion ($19.44 billion), in a trans-Atlantic tie-up that ends the nearly 200-year independence of Britain's most famous candy company.

After more than four months of public sparring that followed Kraft's hostile-takeover approach for the U.K. confectioner, Cadbury's board accepted the U.S. food giant's offer as Kraft relented to the demands of Cadbury management and shareholders, raising its bid and significantly boosting the cash component.

Kraft agreed to pay 840 pence a share for Cadbury, as well as a 10 pence dividend. The revised offer is for 500 pence in cash for each Cadbury share and 0.1874 new Kraft shares for each Cadbury share, an increase from its original offer of 300 pence in cash and 0.2589 new Kraft shares. Cash now makes up 60% of the offer; originally, it was just 40%.

Tuesday's deal unites Cadbury, which focuses solely on candy and traces its roots to 1824, with its larger and more diversified U.S. counterpart. Kraft covets Cadbury in part because of the U.K. company's access to fast-growing developing markets such as India and Brazil.

The deal came as Kraft faced a deadline imposed by U.K. takeover authorities to make a final offer for Cadbury by the end of Tuesday. Cadbury has repeatedly rebuffed Kraft since the Northfield, Ill., company first publicly announced its offer in early September, which was then valued at about $16.5 billion.

Many Cadbury shareholders in recent days have been vocal in their opposition to Kraft's cash-and-stock offer, which until the weekend was valued at about 770 pence a share. They might now be won over by the new offer, since many of the holders are hedge funds that bought Cadbury stock after Kraft put the company in play, and are only looking for a relatively small return. The recommendation from Cadbury's board is also likely to make a big difference in convincing long-term Cadbury shareholders, many of them big U.K. institutional investors, that selling to Kraft now is the right thing to do. Cadbury shareholders have until Feb. 2 to accept the offer.

It now appears likely that Hershey Co., which has been considering a bid of its own, will drop out. People familiar with the matter save said 850 pence is out of the Pennsylvania company's price range. In addition, the Kraft-Cadbury accord includes a £117.7 million break-up fee, which would add to the price of a bid for Hershey.

The U.K. takeover panel on Tuesday gave Hershey until Monday to announce a competing offer for Cadbury or take itself out of the running.

Cadbury shares rose 3.5% to 835.50 pence in London. After trading for months at a premium to the offer, the shares now trade at a discount, indicating investors aren't expecting a higher offer. As part of the new offer, Kraft said it would reduce the level of acceptances from Cadbury shareholders required to 50% plus one share from 90%.

The latest round of talks was initiated by Kraft on Monday, according to a person familiar with the matter. Kraft Chief Executive Irene Rosenfeld had returned to London over the weekend after spending last week in the U.K. trying to sell Cadbury shareholders on the deal.

The move to engage with Kraft was an abrupt U-turn for Cadbury and its chairman, Roger Carr. He called Kraft a "low-growth conglomerate," accused it of showing "contempt" for Cadbury shareholders with its initial offer price and asked those shareholders not to let their company be "stolen." He and Cadbury Chief Executive Todd Stitzer have also criticized the track record of Kraft management, led by Ms. Rosenfeld. The two men repeatedly signaled that they would rather do a deal with Hershey, which they indicated would be a better cultural and operational fit for Cadbury.

The deal comes with significant risks for Kraft. Cross-border transactions have tended to fare poorly over the years. And Kraft's own shareholders—including its largest holder, Warren Buffett's Berkshire Hathaway—have publicly worried about overpaying for Cadbury.

Ms. Rosenfeld met with Mr. Buffett recently and he was "totally supportive" of the new terms, a person familiar with Kraft's offer said. Mr. Buffett didn't return calls requesting comment. The billionaire investor had said he would vote against the issuance of shares Kraft had planned to use to help pay for the deal before it was reconfigured. The new offer involves the issuance of fewer shares and no longer requires a Kraft shareholder vote.

Combining with Cadbury would catapult Kraft into the highest tier of the global confectionery industry, potentially expanding Kraft's sales outside of North America and Europe. Already, Cadbury is the biggest confectioner in growth markets such as India, Mexico, Egypt and Thailand, according to consulting firm Euromonitor International, and emerging markets provide 38% of the company's global sales, compared with about 20% at Kraft. Cadbury's sales in the Asia-Pacific region alone amount to about 20% of the company's revenue. Cadbury has about $500 million in sales in Mexico, while Kraft has about $350 million there, according to Barclays Capital analyst Andrew Lazar.

Buying Cadbury would also add strong sales of chewing gum, especially in Latin America, to Kraft's portfolio. Confectionary products typically have higher margins than Kraft's company-wide margin.

In addition, Kraft would be able to secure more sales at convenience stores in the U.S. and Europe, a growing outlet for selling food in small servings. The gum, chocolate and other food sold in those outlets tend to carry higher profit margins than food sold at a grocery store, and convenience stores typically carry few Kraft products. Grabbing hold of Cadbury would immediately give Kraft a potentially new, and more profitable, channel of distribution.

"It's a great deal for Kraft as it minimizes dilution of shareholders," said William Ackman, head of Pershing Square Capital Management, which owns about 2.2% of Kraft shares. "Cadbury could not have achieved the same values on its own."

A deal would largely consign Hershey to selling chocolate in the U.S., a country with a slow-growing population in the midst of deep economic turmoil. Without greater access to growth markets Hershey faces a future of sales and earnings growth largely dependent on price increases or cost cuts. A spokesman for Hershey declined to comment.

For Mr. Carr, the Cadbury chairman, the current saga began at the Lisbon airport one Friday afternoon last August. On his personal mobile phone, he found a voice mail from Kraft CEO Ms. Rosenfeld asking him for a meeting in London the following week.

When the two later met at Mr. Carr's office, Ms. Rosenfeld surprised Mr. Carr by almost immediately announcing she had a proposal to make. What surprised him even more was that she expected a swift answer, he recalled. Mr. Carr said the price she had proposed was inadequate and that he needed to confer with Cadbury's board. The meeting with Ms. Rosenfeld lasted a mere 20 minutes.

"She got on her Gulfstream, she flew back to America and I never heard from her again —until the letter," Mr. Carr recalled, referring to the Aug. 28 letter that put the iconic company on the block.
Unilever sells Country Crock line to Hormel
1/19/2010

Unilever sells Country Crock line to Hormel

Unilever sells Country Crock line to Hormel

Hormel Foods Corp. said it has agreed to acquire the Country Crock chilled side-dish line from Unilever United States Inc., a subsidiary of Unilever plc.

Terms of the acquisition were not disclosed, but Unilever noted in a separate release that the Country Crock line generated about $50 million in revenue in 2009.

The acquisition is expected to close by February.

Unilever said Hormel will market and sell Country Crock products under a license agreement. No Unilever employees will be transferred with the business.

Unilever is one of the world's biggest consumer-products companies.

Austin, Minn.-based Hormel produces and markets food products. It said the purchase represents a "significant opportunity" to expand in the growing segments of convenient meals and side dishes and complements its existing protein-based refrigerated products.
Heineken to buy Mexican brewer Femsa
1/11/2010

Heineken to buy Mexican brewer Femsa

Heineken to buy Mexican brewer Femsa

Heineken said Monday that it would buy the beer operations of Femsa, one of the biggest brewers in Mexico, in an all-share transaction that values the business at $7.6 billion. The move would further consolidate the beer industry into a few global players.

The move will make Heineken a “more competitive player in Latin America, one of the world’s most profitable and fastest-growing beer markets,” the chairman and chief executive of Heineken, Jean-François van Boxmeer, said in a statement.

Heineken will issue 86 million new shares to finance the deal, the first time it has done so for a takeover since 1968.

Heineken shares were up 1.075 euros, or 3.26 percent, to 34 euros on the Amsterdam exchange.

After the deal closes, Femsa will hold 20 percent of the Heineken Group, making it one of the Dutch brewer’s largest shareholders. Femsa will also have the right to appoint two nonexecutive directors. The transaction is expected be completed in the second quarter of 2010.

Femsa, which is formally known as Fomento Económico Mexicano S.A.B., makes Dos Equis and Tecate.

“It’s a transformational deal for Heineken,” said Marco Gulpers, beverage analyst at ING. “We were expecting a deal north of $10 billion. The way they structured it, this is creating more value.”

Over the last decade, companies in the beer industry have combined rapidly.

One of the most notable deals included the 2002 sale of Miller Brewing of the United States to South African Breweries for $3.6 billion.

Against the backdrop of “the reconfiguration of the global brewing landscape, scale and geographic diversification are more important than ever,” José Antonio Fernández Carbajal, chairman and chief executive of Femsa, said in a statement Monday.

Besides giving Heineken a bigger foothold in Latin America, especially the highly profitable Mexican market, the deal with Femsa also offers Heineken the 83 percent of Femsa’s Brazilian beer business that the Dutch company does not already own.

Femsa’s share of the Mexican beer market is 43 percent; it has a 9 percent share in Brazil.

For Femsa, merging with Heineken could help bolster its competitive position, especially as it continues to battle its larger Mexican rival, Grupo Modelo, in which AB InBev has a noncontrolling 50 percent stake. AB InBev is also strongly positioned in Brazil.

About a quarter of Femsa’s revenue in 2008 of 168 billion Mexican pesos ($13.3 billion) came from its beer operations. The company posted about $1.6 billion in operating profit that year.

Heineken said in its statement that it expected the transaction would provide cost savings of 150 million euros ($218 million) a year, within three years.
John Morrell & Co., a subsidiary of Smithfield Foods buys Premium Pet Health
1/6/2010

John Morrell & Co., a subsidiary of Smithfield Foods buys Premium Pet Health

John Morrell & Co., a subsidiary of Smithfield Foods buys Premium Pet Health

John Morrell & Co., a subsidiary of Smithfield Foods Inc., announced Tuesday that it had become sole owner of Premium Pet Health LLC. John Morrell, a Cincinnati-based producer of processed meat and fresh pork, had a 51 percent interest in Premium, a Sioux City, Iowa-based supplier for pet-food processors. Details were not disclosed.

"As we continue to focus on our core businesses, it is logical for us to invest in a company that is synergistic to our fresh pork processing business and also has a superior return on invested capital," said Smithfield's president and CEO, C. Larry Pope, in a statement.

On Monday, Smithfield announced it had sold two of its companies - RMH Foods LLC and Maverick Food Co. Ltd.
Novartis AG buys all outstanding shares of Alcon Inc.
1/4/2010

Novartis AG buys all outstanding shares of Alcon Inc.

Novartis AG aims to get full ownership of Alcon Inc. through the purchase of a 52% stake in the U.S. eyecare company from Nestlé SA and by buying out minority shareholders, in a deal that will bring the Swiss drug maker much closer to its goal of becoming a global health-care conglomerate.

Getting a strong foothold in the market for eyecare products is part of Novartis's strategy of branching out into fast-growing areas of health care to make up for slowing sales of branded prescription drugs. The Swiss group is also investing heavily to build its generic drugs and vaccines businesses, two sectors with double-digit annual sales growth.

If the deal goes through as planned, Novartis will have spent a total of $49.7 billion on Alcon, marking the biggest deal in Swiss corporate history, ahead of crosstown rival Roche Holding AG's purchase of biotechnology company Genentech for $46.8 billion last year.

Novartis, based in Basel, is paying Nestle $28.1 billion, or $180 a share, in cash to bring its Alcon holding up to 77%. It plans to finance the deal through the issuance of up to $16 billion in debt, and from current cash. Pending regulatory approval, Novartis expects to conclude the deal in the second half of 2010. Novartis bought 25% of Alcon two years ago.

The Swiss drug maker is also proposing to take out Alcon minority shareholders by merging Alcon into Novartis in a share swap. Offering 2.8 Novartis shares for each Alcon share, this implies a price of $153 for each share held by the public. The merger requires approval by the boards of both companies, as well as two-thirds approvals by shareholders of both companies.

Minority shareholders probably won't be pleased about being offered a lower price for their shares than Nestlé, and the independent directors representing them will almost certainly try to extract a higher price, analysts said.

But under Swiss takeover law--which applies in this case because both Alcon and Novartis are incorporated in Switzerland--Novartis has the upper hand. Once it buys Nestlé's 52% stake, the drug maker will be able to use its 77% Alcon stake to vote the merger through even if minority holders oppose the deal.

Novartis Chief Executive Daniel Vasella told reporters Monday that he considers the offered price fair. In part, the price paid to Nestlé is higher, because it allows Novartis to gain control of Alcon, he said.

For its part, Alcon said in a statement that its independent directors are evaluating the offer, and noted that it represents a 15% discount to the price that Novartis is paying Nestlé.

Alcon is best known to consumers for its contact lens solutions, but most of its $6.28 billion in sales for 2008 came from devices used in eye surgery and from medicines for eye diseases such as glaucoma.

Novartis expects to generate around $200 million in annual pre-tax cost synergies from owning 77% of Alcon, and a further $100 million should it succeed in obtaining full ownership of Alcon. Nestlé said it will use the proceeds from the deal to launch a 10 billion-Swiss-franc ($9.66 billion) share-buyback program later this year.
Pinnacle Foods Group buys Birds Eye Foods for $1.3 billion
1/1/2010

Pinnacle Foods Group buys Birds Eye Foods for $1.3 billion

Pinnacle Foods Group has purchased frozen-foods maker Birds Eye Foods for $1.3 billion in a deal that closed last week. The sale gives Pinnacle the largest market share in frozen-vegetable sales at 26.5%.

Rochester, N.Y.-based Birds Eye employs 1,700 nationwide.

The Birds Eye brand accounts for 26.5 percent of the nation's frozen vegetable sales, making it the top brand by market share.

Pinnacle Foods, based in Cherry Hills, N.J., is a subsidiary of The Blackstone Group, a New York City investment firm. Blackstone is a big player in the processed food world. Through Pinnacle Foods, it owns companies that manufacture and distribute products ranging from Duncan Hines baking mixes and Vlasic pickles to Hungry-Man frozen dinners and Lender's bagels.

New York City-based private equity firm Vestar Capital Partners had owned 55 percent of Birds Eye. Pro-Fac Cooperative, a Perinton, N.Y.-based agricultural cooperative, said Wednesday it had received a $238 million payment for its 40 percent stake in Birds Eye. Birds Eye executives owned a 5 percent share.

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