Financial Daily from THE HINDU group of publications
Friday, Jan 09, 2004

News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Marketing - Strategy
Corporate - Outlook


Wrigley's acquisition of Joyco seen to stimulate confectionery market

Our Bureau

New Delhi , Jan. 8

THE Wm. Wrigley Jr. Company's formal announcement of signing a purchase agreement with the privately-held Spanish food conglomerate, Agrolimen, for certain confectionery businesses of its Joyco Group, including in India, is being seen as a move that will spur the Rs 1,500-crore domestic confectionery market.

The transaction involves Joyco's operations in India, besides China, France, Italy, Poland and Spain. According to a company statement by Wrigley's, key additions to the Wrigley Company's stable of brands will include Boomer bubble gum, Pim Pom lollipops and Solano candy, which are currently sold in over 70 countries.

All three are Joyco India Pvt Ltd's flagship brands. Smaller brands in the company's domestic portfolio include Bonkers soft chews and Trex chewing gum. According to industry estimates, Joyco's domestic turnover is about Rs 200 crore. "The acquisition will help in consolidating the confectionery market, which remains a fragmented, high-volume, low-margin business. Since the confectionery trade is driven by distribution and trade margins, survival in this market is tough," said analysts tracking the FMCG sector.

Leading confectionery players in India include Perfetti Van Melle, Hindustan Lever, ITC and Nestle.

It is not clear whether Mr Arun Hegde, Managing Director of Joyco India, will continue to be the overall in-charge of the company. While Mr Hegde was not available for comment, company sources indicated that restructuring at the top management level jointly by Wrigley and Joyco was in the offing. Mr Hegde has also been holding the designation of Area Director, Asia, Joyco.

"The key drivers of acquisitions for the Wrigley Company are a strategic fit and hold potential for significant value creation," Mr Bill Wrigley, Jr, Chairman, President & CEO, Wrigley, said in a company statement. "The addition of the strong brands, people and confectionery expertise from Joyco will increase the long-term success of our business," he added.

Wrigley's acquisition of Joyco involves a cash transaction totalling $272 million, funded from the company's cash and existing credit lines. The Joyco acquisition is expected to be accretive to overall company earnings by 2005.

More Stories on : Strategy | Outlook | Food & Dairy Products

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
National Geographic to explore Mars


ESPN STAR buys European football telecast rights
Wrigley's acquisition of Joyco seen to stimulate confectionery market
`Ties with customers crucial'
Porter Novelli in dual alliance
French dairy major Lactalis enters Indian cheese market
Abacus Netcomm opens `Think World' PC showroom
How to cash in on customer impulse in jus' 15 seconds
Barista Coffee aims at No. 2 slot in world



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line