Nutella-maker Ferrero has agreed to buy Britain's Fox's Biscuits, looking to expand its cookie business in Europe and take advantage of increased consumption as many Britons work from home.
The Italian group has expanded rapidly over the past five years under the leadership of Giovanni Ferrero, son of Michele, creator of famous hazelnut spread Nutella.
The group declined to comment on the value of the deal, but a source close to the matter told Reuters that Ferrero will pay £250 million ($322 million) for Fox's.
'Sweets Consumed Outside Meals'
The proposed acquisition is a further signal of Ferrero's intention to strengthen its position in a category known in the industry as 'sweets consumed outside meals' and limit its reliance on chocolate products.
Fox's, a 167-year old company that sells a wide range of snacks including British favourites such as Crunch Creams and chocolate-dipped Viennese, adds to Ferrero's acquisitions of European biscuit makers Kelsen Group and Delacre in recent years.
Ferrero last year bought Keebler biscuits from US food group Kellogg Co and launched a Nutella-filled biscuit in an attempt to grab market share from Italian rival Barilla.
It now plans to double production capacity at its Nutella Biscuits plant in southern Italy with an investment of about €80 million ($94 million).
Under the deal announced on Wednesday, Ferrero's Belgian holding CTH will acquire Fox's, other biscuit brands and two production plants from Northern Food Grocery Group (NFGG), part of Britain's Boparan Holdings.
Focus On Core Operations
Boparan is expected to focus on its original poultry business after offloading Fox's and the other brands not related to its core operations.
Ferrero, which has been advised by investment bank Houlihan Lokey, said the acquired brands had sales of about £157 million in the past year.
The transaction, Ferrero's second acquisition in Britain after buying chocolate maker Thorntons in 2015, is expected to be finalised in the next few months, Ferrero said.
Ferrero's turnover has risen above €11 billion through its acquisition spree and expansion in other categories outside chocolate.