Barry Callebaut and Natra Consumer Chocolate Merger Falls Through

Barry Callebaut, the world’s biggest bulk chocolate producer, had announced in March that it planned to sell its consumer business to Natra in exchange for a minority stake of 45%-49% in the Spanish company.

10 Sep 2009 --- Barry Callebaut and Natra have terminated their negotiations regarding the possible integration of Barry Callebaut’s European consumer chocolate business into Natra. Barry Callebaut put the reason is a gap in the valuation of the two companies.

Chairman Andreas Jacobs said: “Our strategic decision to exit the consumer chocolate business remains unchanged. However, we are under no time or financial pressure. We will carefully analyze all strategic options to find the best possible solution.”

Natra said the parties weren't able to reach an agreement under the terms and conditions established initially in the preliminary agreement, adding "this has caused negotiations to end".

Barry Callebaut, the world’s biggest bulk chocolate producer, had announced in March that it planned to sell its consumer business to Natra in exchange for a minority stake of 45%-49% in the Spanish company. At the time, Barry Callebaut said the deal depended on the conclusion of negotiations on long-term financing.

The plan was for the Swiss chocolate company to integrate its European consumer business within Natra. Barry Callebaut was to become a minority shareholder in the Spanish holding, and Natra had agreed to buy a minimum of 85,000 tons annually of liquid chocolate from Barry Callebaut. It would have turned Natra into a significant competitor in Europe’s private-label chocolate sector, with combined sales of €850 million ($1.23 billion) for 2008.

But because of the recent slump in Natra's share valuation, however, Barry Callebaut would have been forced to take a bigger stake in the Spanish company, something it didn't want, a spokesperson for the Swiss company said. Natra's share price has been under pressure since the merger plan was announced in March. The company incurred a net loss in the first half of 2009 amid slumping consumer demand in Europe.

With annual sales of more than CHF 4.8 billion / EUR 2.96 billion for fiscal year 2007/08 (ended August 31, 2008), Zurich-based Barry Callebaut is the world’s leading manufacturer of high-quality cocoa and chocolate products