Kraft to buy out Morocco cookie maker
RABAT (Reuters) - Kraft Foods KFT.O is to pay 1.31 billion dirhams ($151 million) to take full control of Morocco's top cookie maker, Bimo, from local investment holding National Investment Co. (SNI), controlled by the country's royal family, SNI and Kraft said on Tuesday.
SNI said it had signed an agreement for the sale of its 50 percent stake in Bimo to double Kraft Foods' stake in the company to 100 percent.
"This transaction paves the way for a new phase in strengthening Bimo's leadership and development," SNI said in an emailed statement, citing Kraft Foods as "top partner because of its expertise and know-how" in the cookie industry.
Kraft said the deal is subject to customary regulatory approvals. A source close to the deal said it expected to be finalized within six months.
In October, Kraft will split into two companies, one focused on cookies and candy in overseas markets and one focused on North American grocery. Kraft said the takeover of Bimo was part of its strategy to grow in developing markets.
SNI will use the sale proceeds to "reduce its debt and fund affiliates' investment", the source said.
Unlisted Bimo controls close to 13 percent of Morocco's cookie sales, a market share that has been dwindling in recent years due mostly to growing local competition and the effects of free trade deals, mostly with the European Union and Turkey.
SNI said Bimo, founded in 1981 and which currently has two production units and 1,400 employees, had sales worth 831 million dirhams in 2011.
Cookie consumption per capita in Morocco is growing fast although it remains among the lowest in the Middle East and North Africa region.
The deal with Kraft Foods is SNI's third move in what is expected to be a series of transactions involving its stakes in the country's biggest lender, AttijariWafa Bank (ATW.CS), and Morocco's sole sugar refiner, Cosumar (CSMR.CS).
SNI, also involved in partnerships with French firms including Lafarge (LAFP.PA), ArcelorMittal and Renault (RENA.PA), plans to focus its future growth strategy on other sectors such as tourism, telecoms and renewable energies.
Kraft shares were down 16 cents, or 0.4 percent, at $40.06 on the Nasdaq.
(Reporting By Souhail Karam; Additional reporting by Martinne Geller; Editing by William Hardy and Sofina Mirza-Reid)
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