Kellogg completes acquisition in Egypt

by Josh Sosland
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BATTLE CREEK, MICH. — The Kellogg Co. on Jan. 15 announced it has completed its acquisition of an 86% stake in Bisco Misr, the largest packaged biscuit manufacturer in Egypt. Kellogg acquired control of the Cairo-based company at a price of Egyptian Pound 89.86 ($12.58 per share), or a total cost of $125 million.

Kellogg emerged as the highest bidder in a three-month mandatory public tender process for Bisco Misr through the Egyptian Stock Exchange. With a history in the Egyptian market dating back to the 1950s, Bisco was described by Kellogg as “one of the most recognized baked goods companies in Egypt.” Its brands include Bisco Luxe, Chico Chico and Bisco Wafers. The company operates three manufacturing plants, has approximately 3,300 employees and annual sales of about $70 million in 2013.

For Kellogg, the acquisition represents its latest push for a greater presence in non-U.S. markets.

“Bisco Misr is an excellent strategic fit for Kellogg, and Egypt is a growing market with a strong economy,” said John Bryant, chairman and chief executive officer of Kellogg. “A number of Kellogg’s cereals and snacks are already offered in the market, and the combination of the powerful Bisco Misr brands with Kellogg’s iconic brands provides a tremendous opportunity for growth.”

Kellogg said Bisco’s manufacturing capacity and “go-to-market infrastructure,” together with Kellogg’s technology, marketing expertise and well-recognized brands would help strengthen both companies both in Egypt and throughout North Africa.

Bisco’s results will be consolidated into Kellogg’s corporate results. The acquisition, which has been financed with debt, is not expected by Kellogg to have a material impact on its 2015 operating profit totals.
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