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Hershey, Ferrero in Talks for Joint Cadbury Bid
11/17/2009

Hershey, Ferrero in Talks for Joint Cadbury Bid

Hershey, Ferrero in Talks for Joint Cadbury Bid

U.S. chocolate giant Hershey Co. has been in high-level talks with Italian chocolate maker Ferrero Spa to possibly craft a rival joint bid to Kraft Foods Inc.'s $16.7 billion offer for Cadbury PLC, according to people familiar with the matter.

So far, talks between executives at the two firms have not produced an offer and it is unclear whether they will, these people said. The two sides have been in talks for several weeks with Hershey executives more aggressive about pursuing a deal, these people added.

In the last two weeks, Hershey Chief Executive David West has spoken with Ferrero bankers at least twice about teaming up to buy Cadbury, the British confectionery maker, one of these people said.

The discussions are in preliminary stages, however, and haven't included discussion of financial specifics, this person added. A main sticking point so far is which party would end up taking hold of Cadbury's higher-margin gum and candy businesses such as Trident and Halls. Ferrero–a privately-held company that makes Nutella chocolate spread and Tic Tacs with €6 billion ($8.9 billion) in sales last year—is also far smaller than Kraft.

Nor is it clear whether the Hershey Trust, the charitable organization that controls the Pennsylvania chocolate company, would go along with a joint bid. Hershey in recent weeks had all but given up on making a competitive bid for Cadbury, partly because it lacks the financial wherewithal to top Kraft's offer.

Putting together Ferrero and Cadbury operations could pose cost-cutting opportunities in Europe, said a research note on Tuesday from Nomura that was responding to media speculation about a possible Ferrero-Cadbury tie-up.

"As an entirely family controlled entity it is very difficult to gauge Ferrero's thinking here," the Nomura analysis said. "But being left on the sidelines of consolidation taking place around them can't be an attractive proposition."

The talks, however preliminary, are the first concrete evidence that rival bidders for Cadbury may emerge. Kraft, of Northfield, Ill., formally offered to purchase Cadbury for about $16 billion on Nov. 9. In its formal proposal, Kraft essentially maintained the offer it proposed on Sept. 7 when it first publicly announced its intention to buy Cadbury. Cadbury swiftly rejected the hostile offer, calling it "derisory."

If successful, a joint Hershey-Ferrero bid for Cadbury could help substantially build Hershey's sales outside North America and give it access to faster-growing gum and candy markets. About 85% of the Pennsylvania company's sales are in the U.S. It is unclear what strategic benefits Hershey could offer Ferrero, aside from pitching in money to beat out Kraft with a higher bid.

Cadbury declined to comment. Kraft spokesman Michael Mitchell declined to comment on "market rumors." Ferrero and Hershey also declined to comment.

Kraft had faced a U.K.-imposed deadline of Monday to make its proposal official or walk away. Many analysts had expected Kraft would boost the offer modestly. But the board of the U.S. food giant voted Friday to hold the offer at 300 pence in cash and 0.26 new Kraft share for each Cadbury share, according to a person familiar with the matter.
Unilever to combine personal-care groups in New Jersey
11/11/2009

Unilever to combine personal-care groups in New Jersey

Unilever to combine personal-care groups in New Jersey

Unilever is in the process of grouping its antiperspirants, deodorant and hair-care group with its skin-care business. The company will close its Chicago offices, affecting about 200 workers, and establish the consolidated unit at its North America headquarters in Englewood Cliffs, N.J.
Pfizer names Todd Magazine President, Consumer Health North America
11/11/2009

Pfizer names Todd Magazine President, Consumer Health North America

Pfizer names Todd Magazine President, Consumer Health North America

Please join us in congratulating Todd Magazine who been appointed President of Pfizer’s Consumer Healthcare, North America. Todd will be accountable for Pfizer’s entire over-the-counter product portfolio, which includes brands such as Advil, Centrum, Caltrate, Chapstick, and Robitussin among others. The US and Canada are the #1 and #2 markets respectively.

Most recently Paul was with Pepsico as President, Gatorade & Propel. Other assignments at Pepsico included President, Quaker Foods and CMO for Quaker. Todd started his career with P&G in several Marketing leadership positions. Paul has earned his undergraduate degree from Michigan and an MBA from Kellogg School of Management.
Kraft Makes Hostile Bid for U.K.'s Cadbury
11/9/2009

Kraft Makes Hostile Bid for U.K.'s Cadbury

Kraft Makes Hostile Bid for U.K.'s Cadbury

Cadbury PLC emphatically rejected a £9.8 billion ($16.28 billion) hostile bid from Kraft Foods Inc., setting up what could be a lengthy tussle for control of the British confectioner.

By making its offer official, Kraft effectively appeals directly to Cadbury shareholders to accept a merger proposal that Cadbury's executives and directors steadfastly rejected in early September. Kraft, facing lackluster sales and upward pressure on its raw-material costs, wants to absorb Cadbury to boost its exposure to developing markets and growth prospects.

According to U.K. takeover rules, by launching its offer Monday, Kraft sets in motion a 28-day deadline for it to publish a prospectus on the offer for Cadbury shareholders.

Kraft would then have as many as 60 days to collect enough shares to seal the deal. That means the takeover fight could last until early February. Should another company launch an interloping bid in the meantime, the takeover battle could drag on even further.

In its swift rejection of the Kraft bid, Cadbury touted its strengths as a standalone business with familiar brands. In a statement, Cadbury Chairman Roger Carr said the company's board "emphatically rejected this derisory offer and has strengthened its resolve to ensure the true value of Cadburyis fully understood by all."

He added that Kraft's offer "does not come remotely close to reflecting the true value of our company."

Kraft had until 5 p.m. London time Monday to make its offer. The U.K. Takeover Panel issued a so-called Put Up or Shut Up Order at Cadbury's request. The order forces Kraft to formalize its takeover offer or walk away for at least six months.

While Kraft Chairman and Chief Executive Irene Rosenfeld had been expected to approach Roger Carr, Cadbury's chairman, to try to seal a friendly deal before going hostile, it appears no such offer was made as the two sides remain too far apart on price. By going to Cadbury's shareholders directly, Kraft is effectively seeking to go around Cadbury's board and executives in an effort to get a better price.

Cadbury recently reported better-than-expected quarterly results, which may bolster the argument of Mr. Carr and Cadbury Chief Executive Todd Stitzer that the company is worth more on a stand-alone basis. However, the decision on whether to sell the company may largely rest with hedge-fund investors who have piled into Cadbury shares during the past two months. Such investors tend to have a shorter investment horizon and may be willing to sell out for a quick and relatively small profit.
Former Ahold USA executive Dwyer becomes Michael Foods CEO
11/3/2009

Former Ahold USA executive Dwyer becomes Michael Foods CEO

Former Ahold USA executive Dwyer becomes Michael Foods CEO

Michael Foods Inc. on Monday said it’s hired a former Ahold USA executive to be its new president and CEO.

James Dwyer Jr. brings a “wealth of food experience and strong leadership to the team at Michael Foods,” said Gregg Ostrander, the executive chairman of the Minnetonka-based food products company’s board.

Ostrander, who was Michael Foods CEO from 1994 to 2007, stepped back into his old role in April when David Johnson left to become president and CEO in the Americas for Swiss chocolate products company Barry Callebaut.

Dwyer’s previous positions included executive vice president of private brands and e-commerce at Ahold USA, the U.S. branch of the Netherlands-based food retailing operator, and chief business development officer for Ahold’s Stop and Shop Cos. subsidiary.

Michael Foods’ principal products are specialty egg products, refrigerated potato products, cheese and other dairy products.
P&G might buy Sara Lee unit
10/22/2009

P&G might buy Sara Lee unit

P&G might buy Sara Lee unit

Procter & Gamble is said to be in talks to purchase the international household products unit of Sara Lee Corp. P&G is mainly interested in the air-care business, which makes Ambi Pur air fresheners, but Sara Lee prefers one buyer for the entire unit, sources say.
Dean Foods names Scalzo COO
10/21/2009

Dean Foods names Scalzo COO

Dean Foods names Scalzo COO

Dairy company Dean Foods Co. has promoted Joseph Scalzo, president and CEO of Dean Foods’ WhiteWave-Morningstar group, to chief operating officer.

Scalzo will assume his new duties on Nov. 1.

Dallas-based Dean Foods (NYSE: DF) said Scalzo will now be responsible for the operations of all Dean Foods business divisions, which includes Fresh Dairy Direct, WhiteWave, Morningstar and Alpro.

Scalzo has been charged with leading the effort to transform Dean Foods’ organizational structure, the company said.

In his career, Scalzo previously assisted in the transformation of companies such as Gillette’s Global Personal Care Division and WhiteWave Foods-Morningstar, a Dean Foods segment.

Blaine McPeak will be filling Scalzo’s current post by serving as president of the WhiteWave Foods segment. McPeak will now oversee the Horizon, Silk Soymilk, International Delight and Land O’Lakes dairy product segments.

Dean Foods Co. saw its profit surge 31 percent in the second quarter of the 2009 fiscal year as the company reported lower interest expenses and growth in its Fresh Dairy Direct and WhiteWave-Morningstar business divisions.

Dallas-based Dean Foods (NYSE: DF) posted a profit of $64.1 million, or 43 cent
Flowers Foods acquires tortilla maker Leo’s Foods
10/19/2009

Flowers Foods acquires tortilla maker Leo’s Foods

Flowers Foods acquires tortilla maker Leo’s Foods

Flowers Foods, maker of Nature’s Own and Cobblestone Mill bread products and Mrs. Freshley’s snacks, said Monday it acquired tortilla maker Leo’s Foods Inc.

Terms of the deal were not disclosed, but Leo’s Foods, based in Ft. Worth, Texas, has annual sales of $30 million.

The company, founded in 1978, sells its line of corn- and flour-based tortillas and tortilla chips to foodservice and food retailers across the country.

Flowers, which is headquartered in Thomasville, already has a foothold in the U.S. tortilla market through its Mi Casa brand.

Flowers, which has annual sales of $2.4 billion, is looking to expand in the lucrative U.S. tortilla segment, estimated to be between $5 billion and $6 billion a year.

Leo’s Foods, employs 230 and no changes are expected, a Flowers spokeswoman said.

Leo’s Foods’ founders, Leo and Sule Jimenez, currently president and finance executive respectively, have said they will retire.

Flowers Foods is scheduled to release third-quarter earnings Nov. 11.
Former P&Ger and Pringles boss takes over Estee Lauder
10/16/2009

Former P&Ger and Pringles boss takes over Estee Lauder

Former P&Ger and Pringles boss takes over Estee Lauder

When Fabrizio Freda arrived at Estée Lauder two years ago, he was ready for a cautious welcome at the global beauty company.

As chief executive-designate, he was the first “outsider” to be chosen to run a company dominated by members of the founding family since it was founded by Estée and Joseph Lauder in 1946.

He was also a 20-year veteran of Procter & Gamble, the household goods group, where he had most recently been responsible for their Pringles snack business.

“I had to build my credibility,” he says of the months after being hired by William Lauder, the founders’ grandson who was then chief executive. “People were afraid that I would bring in processes instead of creativity.”

Sitting in an executive suite overlooking New York’s Central Park that is decorated with art from the Lauder family collection, the 52-year-old Mr Freda has the handsome polish of a luxury executive, rather than the more utilitarian neatness of a veteran P&G man.

Born and educated in Naples, and speaking with an Italian accent, he wears elegant suits and has the slim build of a man who likes to run, play tennis, ski and scuba-dive.

But it was the core business skills developed at P&G that brought him to Estée Lauder. When he was hired as president and chief operating officer, William Lauder praised him as “strategically focused, financially disciplined” and “results-oriented” – all good, P&G virtues.

This summer, Mr Freda took over as chief executive after having radically reorganised and simplified the company’s business structure, resulting in some of the most drastic job cuts in its history. A newly formed management team has started trimming resources to underperforming brands and has announced plans to wind up Prescriptives, a 30-year-old brand.

Mr Freda says that in his first months, he set out to “make sure that people understood that my respect for the company was enormous” and that he was committed to developing its creativity and entrepreneurial flair.

But, while Lauder had grown to a company with 31,000 employees and annual sales of more than $7bn (€4.7bn, £4.3bn), it had done so as a collection of brands and countries, rather than a single strategic entity. “The company has been growing for years, a very big critical mass, without exploiting scale, without leveraging best practices, without being able to take all the duplicated costs out of the system,” he says.

It is also a company where, according to one former employee, decisions can be complicated by the fact that “the family is everything”. The Lauder family controls 87 per cent of its shares, and there are four family members on the 13-seat board: William, who is now executive chairman; Leonard, his father, now chairman emeritus; and Aerin and Jane, William’s cousins, who are both senior company executives.

Having worked for 18 months in the mid-1980s at Gucci, when it was riven by family tensions, Mr Freda has some experience with the worst complexities of family ownership. But at Lauder, he says, the family’s deep knowledge of the company has been helpful in his efforts to preserve its strengths while making fundamental changes.

William Lauder, he says, “is really my partner”, and the two share responsibility for overseeing human resources and finances. “He helps me make sure that our new direction . . . is never disruptive for the elements of strength of the company.”

That has translated into changes being made while retaining the existing company leadership. Gregory Polcer, who was hired in 2008 from Unilever to direct the company’s global supply chain, is Mr Freda’s only external senior hire. But the existing company leaders, who previously reported separately to the chief executive, have been brought together since July in a new executive committee aimed at taking a broader, company-wide view of resource allocation.

This year’s 6 per cent staff reduction, he says, “was one decision that was only possible by looking at business as a whole in an integrated way”.

This cultural change, he says, needs to be transferred throughout the company’s senior managers and employees. “They need to keep using their strengths . . . and learning to work together in a co-operative way: learn how to work based on strategic priorities that now we have clarified and learn how to work with a more cost-conscious approach.”

Getting these changes accepted, he says, has been helped by being able to demonstrate rapid results, both inside and outside the company. The gains in its 2008 fiscal year, which ended in the summer, included a 25-day reduction in outstanding inventories as a result of tighter management, and market share increases, while sales were only down 2 per cent, excluding currency impact, despite the slump in the economy.

“I think the recession offered us the opportunity to make our ‘burning platform’ better understood,” he says. “It accelerated the acceptance of the changes, and the interest of the organisation in delivering it in time.”

Estée Lauder is now investing some of the saved money into a new approach to innovation based on regional centres that will focus on using local consumer expertise to create products that can then be taken to global consumers.

“We need to go beyond bringing the best of North America to the rest of the globe, which we have done for many years very successfully. We need also to get the best of the world, wherever it is, and bring it globally,” he says.

This, he argues, will build global products developed close to regional consumer expertise, such as Japanese consumers’ expertise in skin whitening, or China’s focus on anti-ageing products.

The global approach to “reverse” innovation might seem to echo his past at P&G. AG Lafley, P&G’s chairman, has argued that global companies should find value in “combining creativity that comes from anywhere and everywhere”.

But Mr Freda argues that by setting up innovation centres around the globe, Estée Lauder is going into new territory. “Many other companies have centralised their innovation; I am speaking about decentralising, so it’s very different from what other consumer goods companies are doing.

“This is very tailored to the Estée Lauder approach,” he says. “Nothing to do with other companies.”
Anheuser to Sell Some Breweries for up to $3 billion
10/15/2009

Anheuser to Sell Some Breweries for up to $3 billion

Anheuser to Sell Some Breweries for up to $3 billion

Anheuser-Busch InBev said on Thursday that it would sell its operations in Eastern and Central Europe to a private equity firm.

The sale is the latest in a series of divestments that the company, based in Leuven, Belgium, set out to make after the takeover of Anheuser-Busch by InBev last year.

The buyer, CVC Capital Partners, will pay $1.68 billion in cash to start, with an additional $613 million in deferred payments and minority interests, and the possibility of $800 million later, depending on the unit’s future earnings.

LeaderShift Blog

LeaderShift Blog

Hershey, Ferrero in Talks for Joint Cadbury Bid

P&G might buy Sara Lee unit

Anheuser-Busch InBev said on Thursday that it would sell its operations in Eastern and Central Europe to a private equity firm.

The sale is the latest in a series of divestments that the company, based in Leuven, Belgium, set out to make after the takeover of Anheuser-Busch by InBev last year.

The buyer, CVC Capital Partners, will pay $1.68 billion in cash to start, with an additional $613 million in deferred payments and minority interests, and the possibility of $800 million later, depending on the unit’s future earnings.

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