Intersnack’s presence in the region is currently limited to Yarra Valley, a natural snack food unit in Australia, which it had attained when it bought UK-based crisp maker Tyrrells from Hershey in 2018.
Gokongwei-owned URC’s businesses in the Oceania include Griffin’s Foods, a New Zealand biscuit producer with a 150-year baking heritage, and Snack Brands Australia (SBA), the country’s second largest player in salty snacks.
URC had snapped up Griffin’s from Pacific Equity Partners for NZ$700m (US$462.34m) in 2014, followed by SBA’s owner Consolidated Snacks for AU$600m (US$415.48m) in 2016.
In exchange for the stake, URC will receive a mix of cash and shares of Yarra Valley Snack Foods. Specific terms were not disclosed.
Creating value within and beyond
URC said the partnership would enable stronger operations for both companies.
“Leveraging on URC and Intersnack’s know-how from their respective markets will yield best practices in manufacturing, supply chain and sustainability practices, setting the groundwork for even larger and more efficient Oceania operations,” the company said in a statement.
URC, in particular, would be able to monetize “some of the synergies it has generated from its early investments in Australia and New Zealand, while still retaining control and its ability to further create value within and beyond Australia and New Zealand.”
The company plans to expand distribution of its products – particularly those produced in the Oceania – to new markets in the Middle East and Europe.
In the first quarter of 2019, URC posted a net income of P3.1bn (US$602k) on the back of a positive operating income that grew 10% to P4bn (US$777k), which URC said was driven by higher sales volumes and average selling prices.
The company churned in net sales of P33.3bn (US$647m) during the quarter, a 7% increase from the same period the year before.
Intersnack Group is a private company with operations in 24 countries.
It has built an extensive product portfolio of savory snacks, including potato and tortilla chips, puffed and other corn snacks, baked products, popcorn and nuts, and presently holds a leading position in all markets, mostly ranking first or second in market share. Brands include the UK’s McCoy’s, Hula Hoops and KP nuts, French brand Vico and German brand Funny-Frisch, among others. It also supplies private-label products.
The Group generates around $3bn in net sales across Europe annually.
The transaction is subject to approval from the Australian Foreign Investment Review Board and New Zealand Overseas Investment Office.