Mergers and Acquisitions

Posted on August 1, 2017

Multi-Billion Dollar Mustard

Touch the Soil News #767 (Feature Photo – Aeae-commonswiki – CC SA 3.0) We’ve all had French’s Mustard and many are familiar with Frank’s RedHot hot sauce. These two Iconic brands are owned by a British company called Rekitt Benkiser – not a name we associate with the mustard. However, Rekitt Benkiser wants to sell its garnishment brands that include French’s Mustard and Frank’s RedHot. Two of the world’s largest food companies – Unilever and Hormel Foods – were in there competing to buy the brands. At the time, talk was around $2.9 billion for the brands. However, neither got the mustard. McCormick Company – the company that makes the…

Posted on June 21, 2017

Amazon Buys Whole Foods – There’s More to the Story (Part 3 of 3)

Touch the Soil News #733 (headquarters of BlackRock, Inc. – the world’s largest investment management firm CC SA 3.0) Behind the scenes of the potential Whole Foods sale to Amazon, there is more at stake for the American public and particularly the investors than first meets the eye. Today, everyone assumes the stockholders of Whole Foods and Amazon will approve the deal. So, other than Jeff Bezos who owns only 16.9 percent of Amazon stock who are some of the other big holders of Amazon stock? Come to find out, some of the largest stockholders in Amazon (besides Bezos) and Whole Foods are one and the same – the institutional…

Posted on June 21, 2017

Amazon Buys Whole Foods – There’s More to the Story (Part 2 of 3)

Touch the Soil News #732 (feature photo – Amazon headquarters in Seattle – CC SA 2.0) Who is Amazon? The surface answer is that it is the world’s largest online retailer. As we will briefly explore, there is a whole lot more to this story. Prior to diving into who Amazon is, our expectation was to find a company fat with profits, making lots of money and the reason why Jeff Bezos is considered the world’s third richest man. What we found was shocking. For the years 2011 through 2015, Whole Foods was more than twice as profitable as Amazon. Amazon had its first year of modest profits in 2016…

Posted on June 21, 2017

Amazon Buys Whole Foods – There’s More to the Story (Part 1 of 3)

Whole_Foods_Market_in_the_Lower_East_Side_of_New_York

Touch the Soil News #731 (feature photo – Interior of the largest Whole Foods Market in East Village, New York – CC SA 3.0) Competition in the grocery business, when combined with the impatience of investors, may bring down grocery prices, but at the risk of broader economic decline in America. Americans will spend approximately $1.6 trillion on food this year – about half at restaurants and half in grocery stores. Unlike years past, the grocery industry has become concentrated (see News piece #725 Food Titans – Prepare for Battle). As Americans, we have become used to companies competing. However, the big companies left to compete are no longer just…

Posted on April 19, 2017

Big Fish Being Eaten by Bigger Fish

Touch the Soil News #676 (feature photo – CCA SA 4.0 International) The Food Chain is always an interesting place to learn about money, economics and the world we live in. The Big Fish: Popeyes Louisiana Kitchen was founded in 1972. The company grew and grew until it had over 2,600 restaurants in 40 states and over 30 countries. It was a big employer too, with around 130,000 employees before a bigger fish swallowed it for $1.8 billion. The Bigger Fish: Restaurant Brands International (RBI) bought Popeyes for $1.8 billion. RBI owns Burger King and Tim Hortons in Canada- which together had over 20,300 restaurants. The new company is…

Posted on April 17, 2017 April 17, 2017

Goodby WhiteWave

Touch the Soil News #675 (feature photo CCO 1.0 Universal Public Domain Dedication) Most of us have never heard of WhiteWave Foods from Colorado. That’s because it is a “parent” company of many different brands. It is the brands we are familiar with, not the ownership and the backroom gamesmanship. WhiteWave was born out of a spin-off from Dean Foods in 2012. So, over the past five years, WhiteWave has been like a snowball rolling downhill and accumulating everything in sight. WhiteWave ultimately owned all of these brands: Earthbound Organics (largest organic farm in the USA) Horizon Organic (think Horizon organic milk) Silk brand soy milk Wallaby Organic Yogurt International…

Posted on March 21, 2017

When Big Capital Speculates

800px-Sprouts_Farmers_Market,_Westwood_Blvd,_Los_Angeles,_CA

Touch the Soil News #654 (Feature photo – CC SA 3.0) While we call it the food chain, make no mistake the primary focus of food-chain giants is not food. It’s about how much money we can take out of the food businesses. After many years of consolidating, the stores of Albertson’s, Safeway, SuperValu, Acme, Jewel-Osco, Lucky, Shaw’s, Skaggs, Seeessel’s, Bruno’s, Smitty’s, Buttrey Food and Drug and Star Market have all been acquired into one company now called Albertsons Companies, Inc. Albertsons Companies Inc. is owned by a capital management firm called Cerberus. News leaked out recently that Albertsons Companies Inc. is looking at buying Sprouts Farmers Market, Inc. (Sprouts)…

Posted on January 16, 2017

History’s Largest Agriculture Mergers Set for 2017

Touch the Soil News #598 (feature photo Rosalee Yagihara CC 2.0) You’ve probably heard bits and pieces of the mega mergers unfolding amongst GMO seed, crop and chemical giants. No doubt that as these mega-mergers strive for completion, there will be global protests around the world. 1) Late in 2016, Monsanto stockholders approved the merger with Bayer AG of Germany. Bayer is to pay $66 billion for Monsanto – creating a GMO and agricultural chemical giant. 2) The Dow Chemical and Dupont merger will create another GMO seed and agricultural chemical giant. At the core of the rationale for merger is an expected synergy of $3 billion a year…

Posted on September 14, 2016 September 14, 2016

$66 billion Check for one of the World’s Most Hated Companies?

Touch the Soil News #492 (feature photo: John Novotny CC 2.0) It is official, Monsanto has accepted an offer – by Bayer of Germany – to acquire Monsanto. Normally, mega companies often trade or exchange stock when merging. However, this deal is totally in cash – the biggest cash deal in human history. We got our hands on the official press release from Bayer (a German company famous for the Bayer aspirin). A large portion of Bayer’s operations are, however, in agricultural chemicals. The boards of directors of both companies have agreed to the deal – now it needs stockholder approval and the approval of regulators in Germany and the…

Posted on August 31, 2016 August 31, 2016

Will Hershey Chocolate Survive Financial Staging?

Touch the Soil News #478 Over the past three (3) months, Hershey has been wrestling with an unsolicited takeover bid by Mondelez. Mondelez is one of the world’s largest snack companies with brands like Oreo Cookies. As fate would have it, 81 percent of the voting shares in Hersheys are controlled by the Hershey Trust and the Trust does not want to sell. Frustrated, Mondelez just announced that it would stop its unsolicited attempts at buying Hershey. However, the Hershey Trust has been under investigation for improper management of funds, and is being forced to restructure its board of directors. A year from now, the new Hershey Trust board may…