Kellogg (K -0.2%) announces it will spend $450M to acquire a 50% stake in African distributor Multipro.
The company also created a joint venture with Tolaram to develop snacks and breakfast foods to sell in West Africa. A right to acquire a stake in Tolaram Africa Foods is also now held by Kellogg in its back pocket.
Global cash and an increased in the issuance of commercial paper will be used to finance the investments in Kellogg's business in Africa.
Large food companies need to focus on bold M&A and innovation actions over recharging iconic brands, concludes Rabobank in a new report on the sector.
A shift in consumer preferences has sparked a need to introduce new brands which are on trend - instead of focusing on "innovation-lite" and product reformulation strategies. Buying promising brands at an earlier stage than normal is seen as a forward-thinking strategy.
RBC Capital Markets thinks Mondelez International (NASDAQ:MDLZ), Kellogg (NYSE:K), or Kraft Foods (NASDAQ:KRFT) would make a logical acquisition for Berkshire Hathaway after reading Warren Buffett's annual shareholder letter.
Buffett was very active in the food sector previously as a backer of 3G in the acquisitions of Heinz and in the Tim Hortons-Burger King combination.
In the next bidding battle for Bisco Misr, Kellogg (NYSE:K) has raised its bid to 86.36 EGP per share, topping a rival offer from the UAE's Abraaj Investment Management, which increased its previous offer by 2%.