Wrigley chief Perez is replaced

Two weeks after Mars Inc. took control of the Wm. Wrigley Jr. Co., the company named a longtime Wrigley insider to run the Chicago-based gum and candy icon.

On Monday, Wrigley named Dushan (Duke) Petrovich president effective immediately, replacing William Perez, president and chief executive office. Perez, who will get paid more than $25 million in severance, will serve in an advisory capacity through the end of the year, the company said.

In 2006, Perez became the first person outside the Wrigley family to be president and CEO of the 116-year-old company.

Perez was president and CEO of Nike Inc. from 2004 to 2006, when conflicts between him and company founder Phil Knight forced him out. Before that, he spent 34 years with Racine, Wis.-based S.C. Johnson, serving as president and chief executive for eight years.

Petrovich is a Chicago native who began his career in the Wrigley finance department 30 years ago and later served as vice president, corporate controller and vice president, corporate treasurer. His most recent role was senior vice president and chief administrative officer.

As president, Petrovich will continue to work closely with Wrigley Chairman Bill Wrigley Jr., and both will report to Mars President and CEO Paul Michaels.

Jim Burns, president of J.W. Burns & Co. investment counsel of Syracuse, N.Y., said Perez did an admirable job focusing on improving Wrigley's growth, profit margins and business operations -- efforts that Mars already has a team to do.

"Perez did his job in a publicly held company," Burns said of Wrigley prior to its takeover by Mars.

"Now that the company is private, it doesn't need that high-profile person there," Burns said. "The (Mars) people wanted a longtime Wrigley insider."

Naterra International Inc., a manufacturer and distributor of consumer personal care brands, has purchased the Baby Magic brand of baby care products from Ascendia Brands in a move that adds incremental growth to the company's existing portfolio. The transaction took place on October 8, 2008. Naterra will immediately begin marketing and distributing the entire Baby Magic line, including the brand’s traditional products: Baby Magic Gentle Baby Wash and the Baby Magic Gentle Baby Lotion.

“Baby Magic is a well recognized brand that has been trusted by moms for more than 100 years and we are excited to add Baby Magic to our company's portfolio of mass market brands,” said Todd First, vice president, sales and marketing, Naterra International Inc.

According to Mr. First, “Baby Magic will continue to provide exceptional value to both the consumers and retailers. The Baby Magic brand will diversify as well as considerably increase the size of our market segment.” Mr. First continued, “Further, this brand acquisition is in line with Naterra’s ongoing strategy in creating high quality, value-added personal care products that perfectly fit our consumer’s needs,”

As the nation’s second largest baby care brand, the Baby Magic acquisition is “an opportunity to build upon Naterra’s 85 year-old tradition and dedication in developing results driven personal care products which has built incredible consumer loyalty,” noted Mr. First.

Former StarKist chief returns to brand as Del Monte completes sale

 

Donald J. Binotto, president and CEO of StarKist, at the new StarKist headquarters on the North Shore. Dongwon Industries Co. bought StarKist from the Del Monte Foods Co.

When word got out that Del Monte Food Co. was considering selling off its StarKist brand, Donald Binotto heard from two different organizations that thought that since he had run the business in the past he might be interested in doing it again.

The Cranberry resident was. He decided to throw his lot in with South Korean company Dongwon Industries Co. instead of a venture capital group also interested in bidding on the business. That turned out to be a good move.

On Monday, the $359 million deal closed, giving Dongwon entree to the U.S. market and getting a problem off San Francisco-based Del Monte's hands.

Mr. Binotto, who this summer was named president and chief executive officer of StarKist, told his 35-person staff at the new headquarters on the North Shore that they had received a once-in-a-lifetime opportunity. "We are, as a group, excited," he said in a telephone interview.

That despite his concession that the packaged tuna business overall had shown a slight decline last year after a couple of flat years. Del Monte officials more than once complained about high fish prices and the struggle to compete in an industry that has consumers trained to look for the cheapest can.

Canned tuna unit sales in the United States dropped more than 7 percent in the 12 months ended Sept. 7, although dollar sales rose about 1 percent, according to Information Resources Inc., a Chicago-based market research firm that tracks data from supermarkets, drugstores and mass market retailers, excluding Wal-Mart.

"We will definitely get this business back on track," said Mr. Binotto, who was part of the team that put tuna in a pouch under Heinz's ownership. He's promising new product introductions within the next six to nine months using ideas borrowed from Europe and from South Korea. "We're going to steal shamelessly from the globe."

Charlie the Tuna also may get a higher profile. Plans call for investing a minimum of $15 million to $20 million annually into marketing.

Within two years, the Pittsburgh headquarters could employ as many as 100 people, he said. Annual sales are now in the range of $550 million to $560 million.

The decision to put the business here wasn't just about being convenient for Mr. Binotto. A number of employees with experience happen to be here as a result of the Heinz and Del Monte connections. Many became available when Del Monte decided to move some functions to San Francisco.

Del Monte announced this week it had transferred to Dongwon or eliminated a total of 33 salaried positions as a result of the transaction. The company still has about 400 employees here.

Another reason to locate in Pittsburgh is that two-thirds of the customer base for StarKist lives east of the Mississippi River, said Mr. Binotto.

The Canonsburg native first got a taste of the tuna business about two decades ago. An Indiana University of Pennsylvania graduate, he was sent to StarKist's facility in Terminal Island, Calif., to work in finance. He picked up experience in other areas, at one point managing the company's fleet of eight fishing boats and then working in marketing and sales.

He moved with StarKist administration to Newport, Ky., and in the late 1990s began to lead the business, which was owned by the H.J. Heinz Co. When Heinz Chairman Bill Johnson moved StarKist headquarters to Pittsburgh, Mr. Binotto came home.

The seafood business changed hands six years ago when Heinz sold it along with other businesses to Del Monte. Mr. Binotto continued to lead StarKist until 2005. "It was a difference in philosophy and I respect that," he said.

Barred from competing in the canned tuna business, he launched a small fresh tuna operation. But now, he's plunged back into familiar StarKist territory and declares himself thrilled by the entrepreneurial freedom offered under Dongwon's ownership.

The South Korean company has several subsidiaries and assets that Mr. Binotto believes will help it better understand and weather the volatile fish market. For one thing, Dongwon has a fleet of 36 fishing boats that should help stabilize supply chain issues.

Officials at Dongwon may be better able to cope with the years when prices shoot up 200 percent only to tumble again the next, said Mr. Binotto.

The StarKist sale included manufacturing networks in American Samoa and Ecuador, in addition to the Terminal Island site.

In official statements, Dongwon Enterprise Vice Chairman Ingu Park said the acquisition should provide cost savings and further the company's globalization strategies. StarKist will be developed as a comprehensive seafood products provider, rather than mainly a canned tuna maker, he said.

The South Korean company noted the 65-year-old brand was a well-known name in American homes. "We will continue to leverage the value this brings as we build upon its 37 percent market share and No. 1 position in the shelf stable tuna category in the United States," said Mr. Park.

Tuna offerings in the grocery store already have international connections. Thai Union International has been sole owner of Chicken of the Sea since 2000. Bumble Bee is part of the holdings of Toronto-based Connor Bros. Income Fund.

The new StarKist venture launches just as the U.S. economy is in turmoil. Mr. Binotto said that was a concern but that StarKist should be able to present its products as a good value that can offer more nutrition than fast-food items.

Ralcorp hires former Kraft exec to lead Post Foods

Ralcorp Holdings appointed Stephen Van Tassel corporate vice president and president of the recently acquired Post Foods business.

Van Tassel joined the company Aug. 4 as part of the acquisition of Post Foods from Kraft Foods Inc.

He will report to David Skarie, co-chief executive officer and president of Ralcorp.

Van Tassel most recently served as vice president of marketing for Post Cereal in North America for Kraft.

St. Louis-based Ralcorp Holdings Inc. manufactures private label food products, including frozen bakery products, cereals, crackers, cookies, dressings, syrups, jellies, sauces, snack nuts and candy. The company acquired Kraft Food’s Post cereals division in a $2.6 billion deal.

InBev SA named AmBev Chief Executive Luiz Fernando Edmond to lead North American operations after the Belgian brewer's $52 billion merger with Anheuser-Busch Cos.

David A. Peacock, now Anheuser-Busch's vice president of marketing, will become president of Anheuser-Busch and will manage all U.S. operations of the combined company, including the brand management of Budweiser and Bud Light.

Both men will be based in St. Louis, which will be the North American headquarters of the combined company.

Anheuser-Busch's shareholders will vote on the merger Nov. 12; InBev's shareholders have approved the deal.

Edmond has been InBev's Zone President Latin America North and chief of Brazilian brewer Companhia de Bebidas das Americas (ABV), or AmBev, since 2005. Ambev is part of InBev, which formed in 2004 when Belgium's Interbrew took control of AmBev in an $11 billion cash-and-stock deal.

He will be replaced by Joao Castro Neves, InBev's zone president for Latin America South, and zone president for North America. Bernardo Pinto Paiva will move from Canada to Argentina to become zone president of Latin America South, replacing Joao.

 

InBev shareholders OK Busch deal

The $52 billion takeover by Anheuser-Busch would create the world's largest brewer.

InBev SA shareholders on Monday backed the company's $52 billion, or €32.8 billion, takeover of Anheuser-Busch Cos. - a deal that would form the world's largest brewer.

They also approved changing the company's name to Anheuser-Busch InBev and a capital increase and share issue that would raise up to $10 billion, or €6.9 billion, to pay for part of the deal.

Cutbacks in U.S.

InBev chief executive Carlos Brito also tried to soothe U.S. worries over possible job losses at Anheuser-Busch, saying he was sticking to his commitment not to close or make new cutbacks to its 12 "very efficient" breweries.

But he added some conditions to this promise: "provided there are no new or increased federal tax or state excise taxes or unforeseen extraordinary events that would negatively impact A-B's business."

The International Brotherhood of Teamsters, a trade union representing some 8,000 Anheuser-Busch truck drivers and other workers, warned that it would hold the company to its promises.

"Unexpected events can happen. The workers of Anheuser-Busch in the United States intend to keep the company to its word at keeping those plants open," said Timothy Beaty, the teamsters' director of global strategies.

InBev Chief Executive Carlos Brito said in a statement that the shareholders' vote of support showed they saw the strategic and financial benefits of combining with Anheuser-Busch.

"We are very pleased to complete this important milestone and we remain on track to close the transaction by the end of the year," he said in a statement. The deal still needs to be cleared by regulators and by Anheuser-Busch shareholders.

Capital increase approved

The company will also have to announce the detail of the share issue, now that it has secured shareholders' agreement for a capital increase to cover an existing equity bridge financing of $9.8 billion in place since the deal was announced in July. It also asked for an extra margin to cover any major currency fluctuations until the share issue is finalized.

More than three-quarters of InBev's shareholders voted in favor of the deal, the name change and the capital increase at a meeting at the company's Leuven, Belgium, headquarters.

They also backed the appointment of Anheuser-Busch (BUD, Fortune 500) chief executive August Busch IV as a director in the new company and changing control of Anheuser-Busch's existing $45 billion senior credit facility and the equity bridge financing of $9.8 billion.

InBev had already said its controlling shareholder - Stichting InBev, which owns a 52% stake - backed these changes with the support of at least another 11%.

Stichting InBev is controlled by three Brazilian financiers - including the investment banker and billionaire Jorge Paulo Lemann - and a group of Belgian aristocratic families.

The takeover would bring together the makers of Budweiser, Michelob, Bud Light, Stella Artois and Beck's and create the world's largest brewer, as well as the third-largest consumer product company.

InBev is currently the world's second-largest beer-maker, narrowly behind SABMiller. Swallowing Anheuser-Busch would see it capturing half of the U.S. beer market and a fifth of China and Russia's.

Foothold in emerging markets

The Belgian-Brazilian brewer said its foothold in emerging markets such as China and Brazil would boost sales of Anheuser-Busch's brands.

Anheuser-Busch agreed on July 14 to be taken over by InBev, heading off what had promised to be a long and acrimonious takeover battle for the St. Louis-based brewer. Ahead of the takeover, the company had already planned to save money by shedding 1,185 positions - mostly by offering early retirement and not filling existing vacancies.

Dr Pepper Snapple Realignment Produces New CMO

As part of a broader restructuring, Dr Pepper Snapple Group (DPS) has a new chief marketer.

Jim Trebilcock, currently senior VP marketing and a 21-year DPS veteran, is assuming overall responsibility for the company's marketing efforts. He will report to DPS President/CEO Larry Young.

Randy Gier, formerly executive VP, marketing and R&D, has "decided to pursue career opportunities outside the company," according to DPS.

The just-announced organizational changes are designed to "provide greater clarity around roles and accountabilities, speed decision-making, drive simplification and enhance retail execution," said Young. "It's the logical next step in ensuring that our focus and resources are squarely aligned with our customers and channel partners and that we continue to respond nimbly to the evolving demands of the marketplace."

In addition to the marketing power shift, DPS, which formally separated from parent Cadbury Schweppes in May, outlined the following responsibility structure:

• Rodger Collins will assume responsibility for the company's finished-goods business in addition to his responsibilities as president of bottling group sales. This is designed to optimize DPS's direct-to-store and national warehouse distribution network and support high-priority initiatives, such as its cold drink strategy.

• Pedro Herran, president of the Mexico and Caribbean divisions, will assume responsibility for corporate strategy.

• Tina Barry, currently VP corporate communications, will move into a newly created corporate affairs role, reporting to Young. David Thomas, senior VP R&D, will also report directly to Young.

• Jim Johnston will continue to lead the beverage concentrates business as well as national account sales for the full brand portfolio across all retail channels, fountain/foodservice and Canada. Johnston will be charged with driving growth in the segment through innovative, brand-led sales programs, working with key retailers and Coke-affiliated, Pepsi-affiliated and independent bottlers and distributors.

• Derry Hobson, executive VP, supply chain, will continue to aligning sales demand, manufacturing and logistics and lead the company's efforts to build a world-class supply chain.

With approximately $5.7 billion in sales, DPS is the No. 3 carbonated soft drink (CSD) company, with approximately 15% CSD share to Coca-Cola Company's 43% and PepsiCo's 31%.

The Dr Pepper brand ranks fourth among all CSDs by volume (behind Coke, Pepsi and Mountain Dew), with a 3.8% market share last year, according to Beverage Marketing Corporation (BMC). The soda's volume declined by 2.5%, to 1.2 billion gallons.

New, higher-end teas have helped revive the Snapple brand, which had been losing ground for years. Snapple is also switching from high-fructose corn syrup to cane sugar as of early next year, in response to consumers' increasing aversion to HFCS (despite no evidence that it's any more unhealthy than sugar). Snapple Antioxidant Water, which has had an uphill battle competing with Vitaminwater, is among the DPS brands that will get new packaging.

However, it remains to be seen whether Snapple's revitalization will be sustainable, points out BMC. In addition, flavored CSDs--which along with diet sodas have in recent years been outperforming the rest of this declining category and driving much of DPS's growth-- have been slipping this year.

"DPS remains poised for growth, albeit possibly not as strong as in the period prior to the de-merger," BMC concludes. "Growth in today's marketplace requires both successful innovation and strong marketing. The company has done well with marketing in the past, but has not been especially innovative in an arena where newer beverage styles like sports beverages, energy drinks and enhanced waters have given rivals competitive edges."

Wrigley’s sale to Mars for $23 Billion approve by shareholders

Wm. Wrigley Jr. Co. shareholders Thursday agreed to sell the 117-year-old Chicago institution to Mars Inc.

In a special morning meeting at Chase Auditorium, they approved the $23 billion deal that makes Wrigley a separate, stand-alone business unit of privately held Mars, which will become the world's largest candy company.

The transaction, which has regulatory approval and is expected to close by Oct. 6, gives Wrigley stockholders $80 per share.

The agreement gives Mars a 14.4 percent share of the global confectionery market. Worldwide sales will be more than $27 billion annually.

Mars owns Snickers, M&M's and Starburst brands. Wrigley sells Juicy Fruit, Orbit and Five gum, Altoids mints and Life Savers candy. The combined company displaces Cadbury, which has about 10 percent of the candy market, as the biggest player worldwide.

Warren Buffett's Berkshire Hathaway Inc., which committed $6.5 billion to help finance the acquisition on top of a Tuesday infusion of $5 billion into investment bank Goldman Sachs, will get a $2.1 billion stake in Wrigley.

When announcing the move in April, William Wrigley Jr., executive chairman, said Wrigley's management -- including CEO William Perez -- would stay in place.

But Wrigley Jr. would get $19.7 million if he leaves the company one year after the sale. He was paid $8.6 million last year when sales at Wrigley increased 15 percent to $5.4 billion and net earnings rose 19 percent to $632 million.

The exchange takes the company private, beyond the demands of Wall Street.

"We are maintaining the soul and values of the company in a way that we will be able to keep people first on the list," said Wrigley, whose great-grandfather founded the company in 1891.

Mars, operated out of New Jersey, is family-run and offers a form of safety, he said.

"There's great risks in anything," Wrigley said. "It's easy to sit here and say we should just keep going as we have, and a lot of people don't realize there's high risk out there."

Wrigley on Thursday reiterated intentions for the company to remain involved in business and cultural initiatives in Chicago to about 250 shareholders at the meeting. Of those who spoke, most were complimentary of the company.

Wrigley announced this week that it sold game Web site Candy stand.com to Funtank LLC last month. Funtank's sister company, WDDG Inc., has managed the 11-year-old site since Wrigley acquired it in 2005.

Perrigo Acquires JB Laboratories

 

 

In a move that is expected to boost annual sales by more than $70 million, Perrigo Company, Allegan, MI, has acquired JB Laboratories, Holland, MI, for approximately $44 million in cash.

Privately-held JB Laboratories is a contract manufacturer of over-the-counter (OTC) and nutrition products for leading healthcare suppliers in the U.S.

"The acquisition of JB Laboratories will further expand our high-quality manufacturing base and provide additional FDA-approved production capacity to help us service our current and future customer needs,” said Joseph Papa, Perrigo's chairman and CEO. “And in addition to the immediate top line sales contribution, this investment will be accretive to earnings this year and beyond. This acquisition further exemplifies Perrigo's commitment to meeting the world's growing need for quality, affordable healthcare."

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients and consumer products. The company is the world's largest manufacturer of OTC pharmaceutical products for the store brand market, with primary markets and manufacturing facilities in the U.S., Israel, Mexico and the U.K.

Unilever sells laundry business to private-equity firm

> Vestar, which bought the business for $1.45 billion, will merge it with its existing operation, Huish Detergents Inc., to form a new company, The Sun Products Corporation, per the firm.

The $1.45 billion price comprised $1.075 billion in cash, preferred shares in Sun Products with a face value of $375 million, and warrants offering the opportunity to acquire up to 2.5% of the common equity of Sun Products, per the companies.

The sale is part of Unilever's previously announced plans to dispose of non-strategic brands with collectively more than €2 billion in turnover.