Brazilian biscuits market leader M. Dias Branco (MDB) has acquired local rival Pelágio Participações for BRL240m (US$130.2m).
Pelágio’s cookies, crackers, pasta and snacks brands – Estrela, Pelággio and Salsito – have “an optimum presence in areas in the north and north-east of Brazil”, said Álvaro de Paula, MDB’s investment director.
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MDB said the deal would also lead to efficiency gains within its crushing units and vegetable shortening plant.
“The company foresees a good synergy potential in relation to costs and expenses in the short term, given that we can immediately supply our main raw materials (flour and fat), expanding our verticality and contributing to operational cost reduction,” de Paula added.
Through this acquisition, MDB’s business will see its share of Brazil’s cookies and crackers sector grow from 24.1% to 25.3%, according to AC Nielsen data.
MDB’s share of the pasta market will increase from 24.5% to 25.2%.
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By GlobalData“The company continues to be on alert for acquisition opportunities,” de Paula said. MDB is said to have made a bid for local biscuits manufacturer, Marilan, which is currently for sale.
