Dive Brief:
- Mondelēz International reached a deal to sell its developed-market gum business in the U.S., Canada and Europe to Perfetti Van Melle Group, a European gum and confectionery maker, for $1.35 billion. Mondelēz will continue to operate its gum business outside these markets.
- The snacking giant said the deal includes gum brands Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubblicious in the U.S., Canada and Europe, as well as a handful of European candy brands. It also includes manufacturing facilities in Rockford, Illinois and Skarbimierz, Poland.
- Mondelēz announced in May that it planned to divest its gum business in developed markets after completing a strategic review of the division.
Dive Insight:
Mondelēz, the manufacturer of Oreo, Ritz and Cadbury, has been reshaping its portfolio in recent years to double down on its dominant position in snacking while positioning its business for further growth.
The sale of Mondelēz’s gum business in developed markets has been rumored for years, and the company finally announced it was pursuing a divestiture earlier in 2022. A sale of the business, which accounts for a small fraction of Mondelez’s total revenue, will allow the company to offload a slower-growing asset compared to the rest of its portfolio while giving it cash to spend on innovation, paying off prior deals or to purchase other snacking brands.
The transaction, which is subject to customary closing conditions, is expected to be completed in the fourth quarter of 2023. The gum brands are expected to complement Perfetti Van Melle’s existing portfolio, which includes several global brands such as Mentos.
“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,” Mondelēz CEO Dirk Van de Put said in a statement.
Mondelēz’s Vision 2030 strategy aims to generate 90% of revenue in chocolate and biscuits, including baked snacks — categories identified as significant growth opportunities — up from 59% in 2012 and 80% today, the company said.
Gum was been one of the hardest hit segments during the COVID-19 pandemic as consumers spent less time on the go, where much of the consumption in the category takes place. In contrast, snacking continued its fast growth as the trend grew in popularity and people spent more time at home.
Mondelēz has worked to build its portfolio in that area. It’s recently acquired several brands including cookie producer Tate’s Bake Shop, premium snacks and chocolate maker Hu, and a majority stake in nut butter-based protein bars and bites Perfect Snacks. Earlier this year, the company agreed to pay at least $2.9 billion for Clif Bar & Company to further expand its reach into the high-growth bar business.
