Barry Callebaut and Natra European consumer chocolate merger negotiations on track

The combination of the two businesses would create a significant private label and third-party chocolate products maker in Europe with estimated annual sales of around €850 million/CHF 1,270 million, according to pro forma combined figures for 2008.

03/06/09 As originally communicated in March, Barry Callebaut, the world’s leading manufacturer of high-quality cocoa and chocolate products, is negotiating with Spanish Natra S.A. the combination of their European Consumer chocolate businesses to create Europe’s leading private label chocolate producer. Following the signing of a Memorandum of Understanding Barry Callebaut and Natra are now negotiating the binding terms and conditions of the business combination and ancillary agreements.

On the occasion of Natra’s annual general meeting of shareholders scheduled to take place on June 30, 2009, Natra will propose to its shareholders several measures in view of the envisaged transaction with Barry Callebaut. For the time being, Natra’s proposals to its shareholders do not reflect any binding agreement between the two parties.

The listed holding company Natra S.A. plans to form two sub-holdings organized by lines of business. The first sub-holding, Natra Chocolates, would group all cocoa- and chocolate-related activities, while the second one, Natra Participaciones, would include all other investments, mainly the shares in Natraceutical and in the vinery Torre Oria. The two parties currently envisage combining their European Consumer businesses in Natra Chocolates, of which Barry Callebaut would become an important minority shareholder. Appropriate minority protection rights for Barry Callebaut are being negotiated. This will include the right of Barry Callebaut to convert its participation in Natra Chocolates into shares of the listed holding company, Natra S.A., at any time within six years.

The negotiations are on track and are scheduled to be concluded by the end of June 2009. The signing and closing of the transaction will be subject to a number of conditions and approvals, including approval of the competent organs of the two parties, of all relevant authorities and secured financing. Subject to these conditions, the transaction is expected to be effective as of the beginning of September 2009.

The combination of the two businesses would create a significant private label and third-party chocolate products maker in Europe with estimated annual sales of around €850 million/CHF 1,270 million, according to pro forma combined figures for 2008, a share of 2.0% of the entire European cocoa and chocolate market and a pro forma production output of around 215,000 tonnes in 2008.