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Vietnam’s Kinh Do says Mondelēz’s $370mn investment requires shareholder approval

Vietnam’s Kinh Do says Mondelēz’s $370mn investment requires shareholder approval

Tuesday, November 11, 2014, 16:44 GMT+7

Global snacking leader Mondelēz International will spend US$370 million buying an 80 percent stake in Kinh Do Corporation’s snack business if Vietnam's biggest confectionery producer wins approval from its shareholders for the landmark investment next month, the company announced Tuesday.

The transaction, scheduled to be proposed to shareholders at Kinh Do’s extraordinary general meeting on December 1, will mark a milestone in Vietnam’s fast-moving consumer goods industry, the Ho Chi Minh City-based company said in a press release.

The proposed investment is expected to be completed in the second quarter of 2015, according to the document.

Kinh Do’s snack division is slated to be consolidated into one business entity under a planned restructuring the Vietnamese confectionary firm previously unveiled, prior to the investment by Mondelēz International, according to Kinh Do.

The new entity does not include Kinh Do’s Kido ice cream and dairy division and its retail bakeries.

The proposed investment of Mondelēz International is in exchange for 80 percent of the shares of the restructured snack business, according to Kinh Do.

“Combined with Mondelēz International’s marketing expertise, innovation platforms and global resources, the proposed investment is expected to create new opportunities for Kinh Do’s leading brands, employees and introduce new choices, flavors and moments of joy for consumers in Vietnam,” the company said.

Kinh Do Corporation chairman Tran Kim Thanh said he is “proud to be able to bring Kinh Do to the next level of growth and to offer new tastes to consumers not only in Vietnam but the world.”

“Today’s announcement is also a firm recognition of Kinh Do as a well-loved brand that has earned the trust of consumers over the years.

“The proposed transaction is aligned to our business direction and will help us to successfully deliver our new strategy,” the chairman said.

Kinh Do is the Southeast Asian country's biggest confectionery producer and makes products such as Cosy biscuits and Solite soft cakes, Reuters said.

The British news agency quoted Mondelez International as saying on Tuesday that it will pay $370 million to buy an 80 percent stake in Kinh Do’s snack business.

Tim Cofer, Executive Vice President and President in charge of Asia Pacific, Eastern Europe, Middle East, and Africa at Mondelēz International, was cited as saying in Kinh Do’s press release that the investment is “a perfect fit” for the company’s growth strategy in the Asia-Pacific region.

“Our companies share a passion for making brands people love, so I’m tremendously excited about what our businesses can achieve together,” Cofer said.

Mondelēz International is one of the world’s leading snack companies, with iconic brands including Oreo cookies, Ritz crackers and Cadbury chocolate.

The proposed transaction is also expected to result in additional investment behind Kinh Do’s well-loved brands, including Cosy, Solite and AFC to bring them to a new generation of consumers, while recognizing the heritage that consumers know and trust, according to Kinh Do.

Mondelēz International will explore opportunities to offer Vietnamese consumers broader access to brands from its global pantry.

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