Crunch time? Danone in talks to sell biscuit biz Michel et Augustin to Ferrero ecosystem

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Although described by Danone as a ‘much loved brand’, Michel et Augustin is no longer an investment priority for the dairy-and-water major. Image source: Ferrero

Seven years after first investing in Michel et Augustin, Danone is in ‘exclusive’ negotiations with potential buyer Ferrero-related company CTH Invest.

CTH Invest, a Ferrero-related Belgian Holding Company, is currently in negotiations to fully acquire Michel et Augustin from Danone. The business markets premiums biscuits and snacks in France, as well as six other markets including the US.

Although described by Danone as a ‘much loved brand’, it is no longer an investment priority for the dairy-and-water major. “Michel et Augustin…falls outside of our investment priorities, in the frame of our Renew Danone strategy,” said Juergen Esser, group deputy CEO.

“This is the best way to create long term value while giving Michel et Augustin the opportunity to thrive under the leadership of a Ferrero-related company.”

Michel et Augustin was founded in 2004 by Michel de Rovira and Augustin Paluel-Marmont. In 2016, Danone took a 40% share and increased this stake in 2019. Prior to these investments, the brand had been described in a similar vein to ‘good mood’ brands Ben & Jerry’s ice cream and Innocent smoothies.

For the Ferrero ecosystem, which is regarded the third largest player globally in chocolate confectionery and the second largest in sweet biscuits, the acquisition strengthen its footprint in France.

The proposed buyout follows successful acquisitions of Burton’s Biscuit Company and Fox’s in the UK, Kelsen Group in Denmark and Delacre in Belgium.

“The planned acquisition by CTH Invest would strengthen the Ferrero ecosystem’s positioning in the premium/gourmet arena targeting a broad and differentiated consumer base,” a company spokesperson told FoodNavigator.

Michel et Augustin’s products are co-manufactured and co-packed in more than 10 locations, mainly in France. As to whether synergies between Ferrero’s current supply chains and those of Michel et Augustin could be leveraged for greater efficiency, the spokesperson said there are no plans to change the company’s manufacturing footprint and model at the moment.

If negotiations are successful, CTH Invest will take over Michel et Augustin’s operations and legal entities in France and the US and plans to retain the employees of the business.

The closing of the transaction is subject to customary conditions and is expected in the coming months.