Kellogg acquires Brazil food firm Parati’s controlling shareholder

Kellogg has agreed to acquire Ritmo Investimentos – the controlling shareholder in Brazilian food group Parati – for BRL 1.38 billion ($430 million). The acquisition furthers Kellogg’s strategic priority to grow its position in the global snacking market and expand its presence in emerging markets such as Brazil.

FILE - This Feb. 1, 2012, file photo, shows Kellogg's cereal products, in Orlando, Fla. Kellogg Co. reports quarterly earnings on Thursday, Feb. 6, 2014. (AP Photo/John Raoux, File)

Parati Group offers a range of regional brands, including Parati, Pádua, Minueto, Zoo Cartoon and Hot Cracker biscuits, which make up approximately half of the company’s business. The rest of the business is comprised of Trink powdered beverages, Parati Lamen instant noodles and Parati dried pasta, Kellogg said.

Its group-wide net sales are expected to be approximately $190 million for the year. Kellogg will accommodate the deal by reducing the number of its own shares it repurchases in 2016 to between $450 million and $550 million dollars – up to $300 million less than previously stated.

Kellogg Company chairman and CEO John Bryant said: “With its outstanding portfolio of popular consumer brands, Parati Group is an excellent strategic fit for Kellogg and our business in Latin America. Brazil is the largest economy in Latin America and this acquisition will allow us to accelerate our growth and improve our margins in the region. This means more growth for the core Parati Group business and our well-loved Kellogg brands.”

Parati, which has five distribution centres, two production facilities and a workforce of 3,200, has a strong presence in small-to-medium or high-frequency retail stores in Brazil, which Kellogg described as being ‘critical to reaching the country’s growing population’.

Maria Fernanda Mejia, president of Kellogg Latin America, continued: “The combination of Parati’s portfolio and sales and distribution capabilities with Kellogg’s global resources – including innovation expertise, extensive shopper insights and customer marketing strength – provides tremendous opportunity. Bringing our companies together enables us to expand our footprint in a rapidly growing market.

“Parati Group has built a very successful business over the past four decades and we have a great deal of admiration and respect for them. They are highly entrepreneurial and strive to provide great-tasting foods that consumers love while also fulfilling their founder’s legacy. We are thrilled to welcome Parati Group to the Kellogg family.”

The latest acquisition is Kellogg’s fourth in emerging markets in the last two years, following deals for Bisco Misr in Egypt and a 50% stake in Multipro in Nigeria and Ghana.

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