Greencore’s Minsterley sale to Müller: analysts’ view

Nicola Mallard, Investec analyst, told FoodManufacture.co.uk: "We are glad to see the saga of who gets the 'white elephant' in Shropshire over.​ Müller is the most sensible strategic owner and the deal suits everyone. ​

The factory has substantial scale and has been reasonably well invested, by all accounts; although analysts were never invited there to look around as it has been a problem child. The scale would allow options for ​Müller in the future.”​

Darren Shirley, analyst with Shore Capital, said: “The Minsterley factory has been a milestone round the neck of Greencore and Uniq. It is good news that within 18 months of buying Uniq, it will be off Greencore's hands, Greencore has been very proactive.”​

Evercreech site​

The disposal is expected to complete at the start of January 2013 for a total price of £4.3M plus stock. By then, Greencore will have transferred the production of other premium desserts lines and the required manufacturing equipment to its Evercreech site.

Greencore said this would conclude the restructuring of the chilled desserts business, which it acquired from Uniq in September 2011. The co-packing arrangement it had with Müller for the manufacture of Cadbury-branded desserts had represented around £25M of turnover, but no material profit.

The market would like to see Greencore focus on reducing net debt, unless further must-have US businesses present themselves, Mallard said. “We are not expecting further acquisitions from ​Müller.”​

Müller confirmed the acquisition of the Minsterley facility, which makes Cadbury chilled desserts, including Cadbury Mousse, Trifle and twin-pot products.

Heiner Kamps, ceo of Müller’s parent firm Theo Müller, said: “The acquisition is in line with our strategy to internationally acquire profitable companies in markets where we already are a successful player.”​

Affordable luxury​

Ronald Kers, chief executive of Müller UK & Ireland group, added: "Müller has the leading position in the UK desserts sector and we are ambitious to build on this. This acquisition gives us the opportunity to further develop Cadbury brand's presence as part of our portfolio, and bring affordable luxury to the category.​ ​

“We are delighted to reach this agreement with Greencore and look forward to working with the team at Minsterley to develop our presence in this exciting category.” ​

Last week year, Shore Capital analysts, Darren Shirley and Clive Black described Minsterley as “a well-known problem child”​.

To read about Greencore’s US expansion plans, click here​.

Meanwhile, Premier Foods today (June 15) announced the sale of its vinegar and pickles business to the Japanese firm Mizkan for £41M.

To read more, click here​.