CUISINE DE France owner IAWS is to announce its intention to extend its bakery empire this morning when it will tell shareholders of its plans to merge with Swiss baker Hiestand.
IAWS is reported to be in advanced negotiations with the baked goods company about merging the two businesses in a deal worth €2.5 billion.
A spokesman for IAWS did not confirm reports yesterday that a merger is near completion, but said the group would make a statement today. The Iseq-listed Irish food group already owns a 32 per cent stake in the Swiss baker.
The deal is planned to be an exchange of shares, and IAWS is also expected to pay an additional €30 million in cash to Lion Capital, the private equity group that recently bought a stake in Hiestand from Focus Capital.
The publicly quoted Swiss baker has grown its business substantially in recent years and the 32 per cent stake on which IAWS spent €60 million is now worth four times as much. Hiestand has a market capitalisation of €680 million, while the market capitalisation of IAWS is €2 billion. The new company is expected to have a dual listing in Dublin and Zurich.
The acquisition would be the biggest ever corporate deal for IAWS and its first major purchase since it bought the US-based sweet baked goods manufacturer Otis Spunkmeyer in 2006 for €445 million. Since then, IAWS chief executive Owen Killian has concentrated on spinning off the group's agri-business interests into a separate entity, Origin Enterprises.
