Swedish confectionery companies Cloetta and LEAF to merge

Swedish confectionery companies Cloetta and Leaf International announced plans to merge. The combined company will own brands including Chewits, Kexchoklad, Sperlari and Sportlife and will have net sales of SEK5.7bn (USD 821.6 m) and recurring EBITA of SEK 666 m, the confectioners said. It will operate under the Cloetta name and become a “leading Swedish confectionery company with a strong base in the Nordic region as well as in Italy and the Netherlands", they added.

Leaf CEO Bengt Baron, who will become chief executive of the combined company, said: "This merger is a perfect match where we will unite iconic, local brands, from complementary categories with very few overlaps. The new Cloetta will offer a full range of strong brands, and a very strong route to market in the Nordic countries as well as in Italy and in the Netherlands. In an industry where the brand is nearly as important as the taste of the product, this transaction makes both industrial and strategic sense."

The transaction, which values Leaf at SEK 6.8 bn, will be financed through a rights issue, an issue in kind to Leaf's shareholders and bank financing. Investors in Cloetta shareholders will hold 42.4% of the combined company. Leaf's shareholders, the private-equity groups CVC and Nordic Capital, will hold the remaining 57.6%.