12月05 Nestle completed the acquisition of Brazil Garoto
Nestle Completed the Acquisition of Brazil Garoto
In 2002, Nestle announced the acquisition of Brazil Garoto company. But Brazil’s antitrust laws were enacted in 2004, so Nestlé had to operate Garoto as an independent entity.
After a long battle with the anti-monopoly law, Nestle will complete the acquisition of Garoto.
In 2002, Nestlé announced plans to buy Brazilian chocolate company Garoto in $ 240 million, but in 2004 the Brazilian Competition Commission voted to stop the acquisition, saying it would affect the Brazilian domestic chocolate market.
Since 2004, Nestlé has achieved control of Garoto, but Garoto is operating as an independent entity with its own production and management rights.
Chocolates Garoto chairman Liberato Milo said that in early September, Nestle and CADE reached an agreement, which marks the two companies will realize the true sense of the full integration.
Mr. Milo’s statement was published in the Brazilian press and confirmed by the Nestlé Press Office at ConfectioneryNews.
Garoto has 70 brands, including Talento.
“In December 2015, Nestlé Brazil submitted a request to CADE to evaluate the acquisition of Chocolates Garoto in 2002,” said Philippe Aeschlimann, a spokeswoman for Nestlé Brazil.
“Considering that the transaction had been under review since 2005, we can not comment on its specificity.”
Nestlé’s investment in Garoto
Since 2002, Nestlé has been investing in the modernization of Garoto’s products and production lines at the Vila Velha plant, according to Philippe Aeschlimann.
Garoto has 70 brands, such as Talento, Baton, Garoto, products include nutrition sticks, capsules, Easter eggs, cooking chocolate, powder chocolate.
There have been rumors that Nestle will abandon Garoto’s Serenata de Amor brand, but Milo called the rumor “a very professional rumor.”
From 2002 to 2015, Garoto’s net profit increased by 167%, 2016 profit is expected to reach 2.5 billion Brazilian real ($ 767 million).
Milo hinted that Garoto plans to launch a single-packed line of chocolate products from cocoa in Brazil’s Espírito Santos state. But Aeschlimann believes it is too early to discuss the launch of the new product.
Brazilian chocolate market
Euromonitor data show that in 2015, Nestle billion competitors because of its international Lacta and Bis two brands of strong performance, leading the Brazilian chocolate candy market, the market share of 32%.
But last year, Nestle and Garoto, won 41.4% of the market share.
Euromonitor predicts that the Brazilian chocolate candy market will grow at a 5 percent annual rate over the next five years and reach 17.7 billion Brazilian real ($ 5.4 billion) by 2020.