Mondelēz International offloads gum business as it doubles down on core snacking categories
Mondelēz International has announced it will sell its developed-market gum business in the United States, Canada and Europe to European gum and confectionery maker Perfetti Van Melle Group. The deal, worth $1.350 billion, is expected to close in Q4 2023.
For Mondelēz, the move advances its reshaping strategy, as outlined at its Investor Day in May, to enable greater focus on growth and reinvestment in its core chocolate, biscuit and baked snacks categories. It will retain its emerging market gum business across Latin America and Asia, Middle East and Africa.
The sale includes manufacturing facilities in Rockford, IL and Skarbimierz, Poland and the gum brands Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubblicious in the United States, Canada and Europe, as well as the European candy brands Cachou Lajaunie, Negro, and La Vosgienne. Mondelēz International will continue to operate its gum business outside the United States, Canada and Europe, led by Stride in China, as well as all of its other candy brands and products.
“As we continue progressing our Vision 2030 focus and acceleration strategy, doubling down on our core snacking categories, we are pleased to transition our developed market gum business to a values-led, family-owned company whose portfolio is a strategic fit, and where our brands and people can thrive,” said Dirk Van de Put, Chairman and CEO, Mondelēz International.
The acquisition of Mondelēz International’s developed market gum business complements the Perfetti Van Melle portfolio—including well-known global brands such as Mentos, Chupa Chups, Alpenliebe, Frisk, Smint, Fruit-tella, Golia, Brooklyn, Happydent, Vivident, Daygum, Vigorsol, Big Babol and Airheads.
Private company Perfetti Van Melle manufactures and distributes confectionery and chewing gum in more than 150 countries and in 2021 reported net revenues of approximately €2.5 billion.
The purchase includes the gum brands Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubbalicious in the United States, Canada and Europe, as well as the European candy brands Cachou Lajaunie, Negro, and La Vosgienne. The manufacturing facilities in Rockford, IL and Skarbimierz, Poland are also part of the deal.
“Perfetti Van Melle will be an excellent home for the management team and employees of Mondelēz International’s gum business in North America and Europe,” said Egidio Perfetti, Chairman of Perfetti Van Melle Group. “We have long admired the product and brand portfolio of the gum business and look forward to combining them with the Perfetti Van Melle brand family,” said Daniele Perfetti, Vice Chairman of Perfetti Van Melle Group.
Mondelēz International’s Vision 2030 strategy aims to generate 90% of revenue in chocolate and biscuits, including baked snacks—categories identified with significant growth opportunities for the Company —up from 59% in 2012 and 80% today.
While the move is not surprising, analysts still see both the strategic and financial implications as incrementally positive.
“From a strategic standpoint, we see this divestiture as growth-accretive while also enabling greater focus on growth and reinvestment in MDLZ’s core chocolate, biscuit, and baked snacks categories,” wrote Andrew Lazar Senior Analyst – Packaged Foods at Barclays. Falling sales in this category were exacerbated during the pandemic and have yet to fully recover, he said. “By our math, we estimate this business was about a -25bps YOY drag to the company’s organic sales growth profile.”
Additionally, the company is still working through its planned divestiture of its global Halls business, which too should benefit Mondelēz for similar reasons, Lazar added.