ZURICH, Sept 7 (Reuters) – Nestle (NESN.S) is purchasing a majority stake in Grupo CRM, a Brazilian premium chocolate maker, according to the Swiss food group. The acquisition is part of Nestle’s strategy to expand into the luxury confectionery market. Grupo CRM operates over 1,000 chocolate boutiques in Brazil under the Kopenhagen and Brasil Cacau brands, and also has a growing online presence. The stake is being acquired from private equity company Advent International, and the deal is expected to be finalized in 2024. Financial details of the transaction were not disclosed by Nestle. However, according to reports, Nestle is expected to pay around 3 billion reais ($602.78 million) or 4.5 billion reais ($904.18 million) for the company. Renata Moraes Vichi will continue to serve as CEO of Grupo CRM and will remain a minority shareholder. Nestle aims to strengthen its presence in the super-premium chocolate segment, where it currently has a limited offering that includes the Italian brand Baci. In the first half of 2023, Nestle’s confectionery sales increased by 10.8% on an organic basis, excluding acquisitions and currency movements. The company also improved its underlying trading operating profit margin by 70 basis points to 14.5%. Swiss luxury chocolate maker Lindt & Spruengli (LISN.S) has also experienced growth, with a 10.1% increase in sales during the first half of 2023 and a 38% jump in operating profit. Laurent Freixe, Nestle’s CEO for Latin America, stated that the acquisition will expand and strengthen the company’s confectionery presence in Brazil, allowing it to enter the high-end segment. The Kopenhagen brand’s chocolate bars are priced at 29.90 Brazilian Real ($6.01), while a box of chocolates retails for around 130 reais. Analyst Jon Cox from Kepler Cheuvreux commented that the deal may seem unusual given Nestle’s focus on its coffee, petcare, and nutrition businesses, but it makes sense. He added that integrating production and focusing on the premium chocolate category can lead to synergies and be a profitable venture. ($1 = 4.9784 reais) Reporting by John Revill, Editing by Friederike Heine, Janane Venkatraman, and Susan Fenton Our Standards: The Thomson Reuters Trust Principles. Acquire Licensing Rights, opens new tab
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