FAST moving consumer goods company Tiger Brands, which last week said it would continue to be on the lookout for possible acquisitions, said on Friday that it had bought Crosse & Blackwell from Nestlé for an undisclosed amount.
CEO Peter Matlare said that, being such a well-established brand in South African homes, Crosse & Blackwell mayonnaise would be a welcome addition to the Tiger Brands stable.
He said the acquisition of the Crosse & Blackwell business was consistent with Tiger Brands' strategy of seeking appropriate local acquisition opportunities that involve leading brands. Tiger Brands will continue to evaluate local and other African opportunities, Matlare said.
Crosse & Blackwell, one of Nestlé's strongest brands, will join a stable which includes All Gold, Black Cat, Koo and Fatti's & Moni's.
Last week, Matlare said organic growth was the core of the company's business, but linked to this was growth through acquisitions and its international expansion plans.
He said there were opportunities in the local market that it "must and will continue to pursue".
The sale agreement, signed as of Friday, will transfer ownership and management of Nestlé's Crosse & Blackwell mayonnaise production plant in Bellville, Cape Town, to Tiger Brands.
The sale is the result of a closed bidding process and follows several months of talks with a range of potential partners - including several black-owned business consortiums which expressed an interest in entering food manufacturing.
After several rounds of discussion and a due diligence process with a short list of four potential bidders, Tiger Brands was found to be the most suitable consortium in meeting three key Nestlé requirements.
These included that the purchasing company must ensure the continued survival and growth of the Crosse & Blackwell mayonnaise brand, ensure a secure future for the about 100 or so employees at the plant, and give a favourable return for Nestlé shareholders.
Nestlé SA chairman and MD Yves Manghardt said the "sale of an asset of this nature is not a decision that is taken lightly".
He said the company regularly reviewed the composition of its portfolio, in particular products and categories that were not in line with its long-term strategic direction. Manghardt said this was in line with the company's objective of focusing on value-added nutrition, health and wellness products.
"The sale of our mayonnaise business accords with this approach," he said.
The transaction is subject to regulatory approvals.