FrieslandCampina enter acquisition agreement in latest growth strategy move

By Mark Astley

- Last updated on GMT

Related tags Irish dairy board Butter Milk

FrieslandCampina enter acquisition agreement for IDB Belgium
Dutch dairy giant Royal FrieslandCampina (FC) has entered into an agreement with the Irish Dairy Board to acquire its Belgium-based continental cheese packing segment IDB Belgium N.V.

The agreement represents FC’s latest move to meet the growth objectives outlined in its route2020 strategy.

If approved by regulators, the acquisition will be completed by 31 July 2012 for an undisclosed sum.

The Irish Dairy Board also look set to benefit strategically through the proposed takeover, with proceeds from the sale intended to fund the firm’s international expansion drive.

IDB Belgium, which is one of the largest packers of continental cheese in Belgium, recorded turnover of around €100m for the year ended 31 December 2011.

FC spokesperson Jan Willem ter Avest told that the acquisition will allow it to create more ways of selling its cheese.

Branded cheese growth

“We have entered in to this agreement because it fits with our route2020 strategy and we want to create more ways to sell our cheeses,” ​said ter Avest.

“In our route2020 strategy, one of the things outlined is growth in branded cheeses. This is one of the ways we can do it. This is all part of a bigger plan.”

Under the strategy, FC hopes to expand its processed products range, capture additional margins and increase its presence in emerging markets.

“Through this acquisition we will be able to provide a better supply to retailers and the food service and IDB Belgium can package cheese in ways we can’t at the moment,” ​ter Avest added.

The acquisition agreement follows the collapse, last month, of talks between FC and Salford Capital Partners in relation to the acquisition of two Balkan-based dairy firms.

FC declined to discuss whether it has plans for further acquisitions in this sector.

“Unlock additional capital”

IDB Belgium, which consists of one production facility in Genk, has been a subsidiary of the Irish Dairy Board since 1988.

The Genk facility, which employs 160 people, includes fifteen packaging lines - offering a variety of slicing and packaging forms and size options.

The Irish Dairy Board, which is the company behind Kerry Gold butter, has outlined plans to invest proceeds of the sale into its strategic growth plans and international acquisitions prospects.

The sale of our continental cheese packing business to Royal FrieslandCampina N.V. is another significant strategic step for IDB,” said​ Irish Dairy Board CEO Kevin Lane.

“The divestment will unlock additional capital to develop more focused routes to market for Irish product at a time when IDB Belgium’s future potential can best be realised with the support of a local dairy partner.”

“Royal FrieslandCampina N.V. can bring greater synergy benefits to the Belgian business as well as presenting partnership opportunities with IDB in the future,” ​Lane added.

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