Cuisine de France owner IAWS has announced it is to extend its bakery empire through a merger with Swiss baker Hiestand. The new company will have combined sales of €2.3 billion.
The Iseq-listed Irish food group already owns a 32 per cent stake in the Swiss baker and has agreed to buy a further 32 per cent from private equity company Lion Capital for €30m in cash and 12.7 million new shares.
IAWS will also make an offer for the remaining shares
The new company is to be called Arytza, and will be listed on the Irish and Swiss stock exchanges. The merger is planned to be completed later this year.
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.
Once completed, the acquisition will 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.
Speaking this morning Mr Killan said he expected double-digit earnings growth from the combined company. "We expect to be delivering double-digit earnings growth and we expect that we ought to be able to double the earnings base of this business over a five-year period," he said .