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  • ACCC keeps its eye on Heinz-Kraft $59b merger

    2019 - 06.21

    Mondelez’s local operations stated it’s trademarks are not affected by the Kraft-Heinz merger. Photo: RICK WILKING Kraft Food’s trademarks such as Vegemite and Cadbury in the Asia-Pacific region were taken over by Mondelez International in July 2013. Photo: Eddie Jim
    苏州美甲美睫培训学校

    The competition regulator is keeping an eye on a proposed mega-deal that would create the world’s fifth-largest food and beverage company.

    The privately held H.J. Heinz will merge with the listed Kraft Food Group to create Kraft Heinz, it was announced overnight, in a deal that valued Kraft at about $US46 billion ($59 billion) before net debt.

    Billionaire investor Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital, which bought Heinz in 2013, will invest $US10 billion into the deal to take a 51 per cent stake. Kraft shareholders will retain the rest.

    Kraft split into two separate public companies three years ago. Kraft focused on US groceries, while Mondelēz International became an international biscuit, chocolate and lollies operation.

    Following this, Kraft Food trademarks in the Asia-Pacific region were taken over by Mondelēz International from July 2013.

    Mondelēz International’s brands here include Cadbury, The Natural Confectionary Co, Ritz and Oreo. It also holds trademark rights for Kraft products such as Vegemite, Kraft Peanut Butter, and Kraft Singles.

    A Mondelēz International spokesman said “our rights on trademarks are not affected by today’s announcement from Kraft Foods Group”.

    Questioned whether there was any cross-ownership between Kraft and Mondelēz International, and when those trademarks expired, he replied: “There’s no relationship between Mondelēz International and Heinz and the licensing arrangements are commercial in confidence.”

    A spokeswoman for the Australian Competition and Consumer Commission said it was “aware of the transaction. If it decides to conduct a public review, it will be listed on the ACCC’s website.”

    If the merger is seen to be substantially lessening competition in Australia, a review would be held, with divestments one possible outcome.

    Neither the competition regulator nor the industry body the Australian Food and Grocery Council have local market-share figures on Mondelēz International or Heinz.

    Heinz products include baby food, baked beans, tomato sauce, and pasta. The last accounts for its Australian operations showed revenue of $534 million and a $12.3 million loss for the eight months to December 29, 2013, due to big changes on its balance sheet from the Berkshire Hathaway-3G Capital buyout.

    The last thorough inquiry into the grocery industry was held in 2008, although this focused on grocery retailing.

    Mondelēz International does not file accounts to the Australian Securities and Investments Commission. The Asia-Pacific region, including Australia, New Zealand, Singapore, Indonesia, the Philippines, India and China, accounted for $US4.6 billion of its $US34.2 billion ($43.8 billion) in revenue in 2014, according to Bloomberg.

    Mondelēz International is led in Australia and New Zealand by Amanda Banfield, and employs more than 3,500 people, according to its website.

    It was controversially promised $16 million from the Coalition to help expand its Tasmanian chocolate business. That pre-election promise was recently ditched.

    with wires

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