After more than a month of speculation, an official announcement that McCain Foods and the PinguinLutosa Food Group have signed a share purchase agreement for the sale of Pinguin's Lutosa division to McCain came on Oct. 19.
The deal, based on an enterprise value of EUR 225 million, encompasses Lutosa's operations in production, marketing and distribution of frozen, chilled and dehydrated potato products, as well as the Lutosa brand. A binding agreement, approved by the boards of directors of both parties, is subject only to confirmatory due diligence and regulatory approvals. Terms were not disclosed.
The announcement came as a surprise to many in the European potato business community, where rumors had been circulating that the buyer would be Lamb Weston. Indeed, the Belgian newspaper De Standaard on Sept. 7 published a story headlined: "Americans Buy Lutosa, Lamb Weston Behind Golden Bid "
The paper later reported that PinguinLutosa received three bids for the Lutosa potato division: one from Florenceville, New Brunswick, Canada-headquartered McCain, another from headquartered, Holland-based Aviko, and the third from Eagle, Idaho, USA-based Lamb Weston, a ConaAgra Foods unit with European headquarters in Kruiningen, Holland.
"This acquisition is in line with our strategy of reinforcing our core potato business in Europe," said Jean Bernou, chief executive officer of Villeneuve d'Ascq-France-headquartered McCain Continental Europe. "The products and brand positioning of Lutosa and McCain are highly complementary. Lutosa will help us to further expand our product offering and cater to a wider range of customers while ensuring continuity in terms of investments and optimal service quality."
Hein Deprez, chief executive officer of the Westrozebeke, Belgium-headquartered PinguinLutosa Group, commented: "When we were approached by McCain, the opportunity for us to focus on our core fruit and vegetable business while allowing the Lutosa division to reach the next level of excellence was too good to pass up. Lutosa developed a strong brand and market position around the world, and can count on a strong team of employees, partners, farmers and traders."
Pinguin acquired Lutosa, a Leuze-en-Hainaut, Belgium-based family-owned company doing business as Van den Broeke-Lutosa, for EUR 175 million in 2007. Its bid was said to be among offers from the same Lutosa suitors this time around.
