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MDLZ - Mondelez International Inc News Story

$65.23 0.4  0.6%

Last Trade - 27/07/21

Sector
Consumer Defensives
Size
Large Cap
Market Cap £65.92bn
Enterprise Value £78.65bn
Revenue £19.62bn
Position in Universe 140th / 7000

BREAKINGVIEWS-Mondelez can be the bad bank of junk food

Wed 9th June, 2021 6:21pm
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.) By Dasha Afanasieva LONDON, June 9 (Reuters Breakingviews) - Mondelez International MDLZ.O has a chance to buck the healthy-eating trend, and shareholders might even thank it for doing so. The $89 billion maker of Oreos is trimming its stake in $50 billion soda and coffee maker Keurig Dr Pepper KDP.O , with the idea of recycling the resulting cash into more wholesome products. The trouble is, it’s not the only one trying to pursue that strategy. The owner of Toblerone and Cadbury will retain just 6% of the maker of Snapple after its sale of a 2% stake goes through on Thursday. Mondelez has also been selling down its stake in Amsterdam-listed coffee group JDE Peet’s JDEP.AS , worth almost $4.5 billion, and said last week that it’s reviewing what to do with its chewing gum business. The plan is to give Mondelez Chief Executive Dirk Van de Put more cash to spend on other types of snacks, including healthier ones. These fashionable assets come at a premium, though. Mondelez bought protein bar Grenade for 200 million pounds, according to the Grocer, which amounted to around 4 times pre-pandemic annual sales. By contrast, Ferrero bought Burton’s Biscuits, which makes Wagon Wheels, for just 1.3 times 2020 sales earlier this month. And sweet treats can expand the top line as well as the waistline. Hershey HSY.N , which makes Twizzlers and Milk Duds, grew sales more than 6% organically in the quarter ending Dec. 31, compared to a year earlier. Besides, sticking to fundamentally unhealthy snacks doesn’t mean Van de Put can’t be an environmental, social and governance crusader too. He can pursue more sustainable ingredients sourcing, packaging and portion control. Distillers like Diageo DGE.L and Pernod Ricard PERP.PA have attempted that balancing act by selling increasingly pricey booze on one hand, while educating punters on the dangers of binge drinking on the other. When it comes to buying up brands, companies happy to become “bad banks” of junk food have supply and demand on their side. As groups like Nestlé NESN.S – which recently admitted in an internal presentation that 60% of its food and drink products are unhealthy in spite of its vaunted wellness strategy, according to the Financial Times – come under more pressure to sell confectionery, shunned assets will get cheaper. Mondelez can have its cake and everyone else’s too. Follow @dasha_reuters https://twitter.com/dasha_reuters on Twitter CONTEXT NEWS - Keurig Dr Pepper said on June 8 that U.S. snacks group Mondelez International would sell roughly a 2% stake in the drinks maker at a price of $35.65 per share, around 3% below the previous day’s close. - Mondelez, whose brands include Oreos cookies and Cadbury’s chocolate, will own 6% of Keurig Dr Pepper’s outstanding common stock after the sale, which is due to close on June 10, and will retain two board seats. - For previous columns by the author, Reuters customers can click on AFANA/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Press release https://news.keurigdrpepper.com/2021-06-08-Keurig-Dr-Pepper-Announces-Pricing-of-Secondary-Offering-of-Common-Stock-on-Behalf-of-Mondelez-International BREAKINGVIEWS-Krispy Kreme IPO looks half-baked urn:newsml:reuters.com:*:nL5N2NK1BV BREAKINGVIEWS-Nestlé without KitKats is logical next step urn:newsml:reuters.com:*:nL8N2HC27B ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe | Editing by John Foley and Amanda Gomez) ((dasha.afanasieva@thomsonreuters.com; Reuters Messaging: dasha.afanasieva.thomsonreuters.com@reuters.net))
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