Ebro expands into US market
billion euro barrier last week, has agreed to buy Riviana Foods,
the largest rice processor in the US.
The acquisitive Spanish firm, which earlier this month paid €4 million for Risella, the leading rice brand in Finland, will take control of Riviana Foods in a deal worth up to €312 million in cash.
"The transaction provides us with penetration in the US market and improves our balance between domestic and international business, giving us worldwide leadership in rice," said Antonio Hernandez Callejas, CEO of Grupo Ebro Puleva.
The US maker of brands such as instant boil-in-bag rice Success and the long grain rice brand Carolina has operations across the US as well as in Belgium, the UK and Central America. It claims to be the number one or two rice marketer in 19 of the 20 top US rice markets.
Already working together as joint venture partners in Europe, both firms believe the deal will bring economies of scale and help them to "compete more effectively and grow more rapidly".
In August last year, Riviana joined forces with Ebro Puleva to step up its presence in the UK rice market. Both companies already operated there - Riviana through Stevens & Brotherton and Ebro Puleva via Joseph Heap & Sons - and agreed to merge these businesses to form a new UK unit owned 51 per cent by the Spanish group and 49 per cent by its US counterpart.
S&B's business is centred on the marketing and distribution of branded and private label rice, dried fruit and other food products, while Heap focuses on rice milling and rice flour milling, as well as being a major supplier of rice flour and bulk rice to industrial customers in the UK. It also offers the Peacock rice brand to ethnic foodservice markets.
The combined company, tipped to have annual sales of around €75 million, has based its commercial marketing and sales activities for rice - as well as dried fruit and other food products - at S&B's base in Orpington, south of London, while rice milling and rice flour production remained at Heap's facilities in Liverpool.
Riviana and Ebro Puelva also have a long-standing partnership in Europe: the two companies jointly own Herto, the Ricegrowers' Co-operative Limited of Australia and Boost Nutrition - all based in Belgium - as well as Euryza in Germany. Herto is one of Europe's leading rice cake manufacturers, while Boost Nutrition's Bosto brand is the number one selling rice in Belgium, and Euryza is one of Germany's largest rice companies.
Ebro Puleva also recently added a number of rice brands owned by the US-based Kraft Foods which are now distributed in Germany, Austria and Denmark by Euryza and Boost Nutrition.
Ebro Puleva - which took over as Riviana's partner after its acquisition of the Herba rice group in 2001 - has extensive dairy and sugar operations as well as rice, and has been steadily disposing of most of its businesses which do not fit within these three core areas.
Ebro CEO Hernandez Callejas, who announced the latest agreement at the presentation of the company's first half results last week, said: "We believe the transaction will be EPS accretive in fiscal year 2004 and that excellent opportunities exist to share best practices and product innovation."
Ebro, the largest producer of rice and sugar in Spain, said it had made a first half net attributable profit of €64.1 million, up from €63.8 million in the same period last year. Revenues rose to €1.0 billion from €973.6 million.
This latest move extends the roll call of companies purchased by Ebro Puleva in the last two years to eight, including Vogan in the UK, Risella in Finland and Denmark's Danrice.
