July 24, 2014 - Blogs
The industry is shrinking in ownership. The recently released annual Rabobank survey of the world’s largest dairy companies found the last 18 months have seen most of the big players battle challenging conditions, with weak economies and supply constraints undermining sales growth in key markets. While 2013 was a challenging year for most of the world’s major dairy companies, Rabobank predicts underlying growth will pick up in coming years; however, many markets will not return to the rapid growth rates seen before 2008.
The result is a global dairy industry that is consolidating at an accelerated pace. With ongoing high milk costs, increased competition for branded players and billion-dollar deals harder to come by, mergers, acquisitions and joint ventures will remain a key avenue to growth and profitability.
In fact, acquisitions have become a more attractive route to grow sales and in 2013, there were 124 dairy transactions, up from 111 in 2012 and the highest since 2007. According to the report, despite the increase in transactions, the dairy sector saw zero billion dollar deals in the 12 months to June 2014.
“The catch is that the number of attractive targets is shrinking and multiples have risen," said Rabobank analyst Tim Hunt. “With billion dollar value deals harder to come by, dairy giants will need to acquire or tie up with more companies than in the past to sustain the same rates of growth."
So what does all this mean? Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive. Fast forward a few weeks, and the M&A action ramped up.
On July 18, Danone announced it had acquired 40 percent interest in East Africa’s leading dairy products company Brookside, which had around €130 million in revenues in 2013. The partnership will significantly enhance the platform Danone is currently building in Africa.
Just four days later on July 22, Agropur, Canada’s largest dairy cooperative, and Davisco Foods International, a U.S.-based cheese and dairy ingredients company, entered into an agreement for Agropur to acquire the dairy processing assets of Davisco. The deal will double Agropur’s U.S. processing operations, increase its global milk intake by 50 percent, and strengthen its position in the North American and international dairy industries.
“The world dairy industry is consolidating at an accelerated pace and our acquisition of Davisco supports our objective of increasing our global presence," said Robert Coallier, CEO, Agropur. “One of our key business objectives is to pursue strategic acquisitions to diversify our geographic markets and product portfolios. This acquisition, like our other recent ones, will help solidify the development and sustainability of our cooperative by securing a favorable strategic positioning at all national, North American and global levels. To remain a leader in our field, we must pursue and continue development efforts that aim directly at profitable growth."
The following are the top 20 global dairy companies in 2013, according to the Rabobank report:
The industry is shrinking in ownership. The recently released annual Rabobank survey of the world’s largest dairy companies found the last 18 months have seen most of the big players battle challenging conditions, with weak economies and supply constraints undermining sales growth in key markets. While 2013 was a challenging year for most of the world’s major dairy companies, Rabobank predicts underlying growth will pick up in coming years; however, many markets will not return to the rapid growth rates seen before 2008.
The result is a global dairy industry that is consolidating at an accelerated pace. With ongoing high milk costs, increased competition for branded players and billion-dollar deals harder to come by, mergers, acquisitions and joint ventures will remain a key avenue to growth and profitability.
In fact, acquisitions have become a more attractive route to grow sales and in 2013, there were 124 dairy transactions, up from 111 in 2012 and the highest since 2007. According to the report, despite the increase in transactions, the dairy sector saw zero billion dollar deals in the 12 months to June 2014.
“The catch is that the number of attractive targets is shrinking and multiples have risen," said Rabobank analyst Tim Hunt. “With billion dollar value deals harder to come by, dairy giants will need to acquire or tie up with more companies than in the past to sustain the same rates of growth."
So what does all this mean? Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive. Fast forward a few weeks, and the M&A action ramped up.
On July 18, Danone announced it had acquired 40 percent interest in East Africa’s leading dairy products company Brookside, which had around €130 million in revenues in 2013. The partnership will significantly enhance the platform Danone is currently building in Africa.
Just four days later on July 22, Agropur, Canada’s largest dairy cooperative, and Davisco Foods International, a U.S.-based cheese and dairy ingredients company, entered into an agreement for Agropur to acquire the dairy processing assets of Davisco. The deal will double Agropur’s U.S. processing operations, increase its global milk intake by 50 percent, and strengthen its position in the North American and international dairy industries.
“The world dairy industry is consolidating at an accelerated pace and our acquisition of Davisco supports our objective of increasing our global presence," said Robert Coallier, CEO, Agropur. “One of our key business objectives is to pursue strategic acquisitions to diversify our geographic markets and product portfolios. This acquisition, like our other recent ones, will help solidify the development and sustainability of our cooperative by securing a favorable strategic positioning at all national, North American and global levels. To remain a leader in our field, we must pursue and continue development efforts that aim directly at profitable growth."
The following are the top 20 global dairy companies in 2013, according to the Rabobank report:
- Nestlé
- Danone
- Lactalis
- Fonterra
- FrieslandCampina
- Dairy Farmers of America
- Arla Foods
- Saputo
- Dean Foods
- Yili
- Unilever
- Meiji
- DMK
- Mengniu
- Sodiaal
- Bongrain
- Kraft Foods
- Müller
- Schreiber Foods
- Morinaga Milk Industry
I want to share a testimony on how Le_Meridian funding service helped me with loan of 2,000,000.00 USD to finance my marijuana farm project , I'm very grateful and i promised to share this legit funding company to anyone looking for way to expand his or her business project.the company is UK/USA funding company. Anyone seeking for finance support should contact them on lfdsloans@outlook.com Or lfdsloans@lemeridianfds.com Mr Benjamin is also on whatsapp 1-989-394-3740 to make things easy for any applicant.
ReplyDelete