Fraser & Neave Holdings places bid to acquire Cocoaland

MALAYSIA—Fraser & Neave Holdings, a Malaysia-based food and beverage manufacturer, has placed a bid to acquire local peer Cocoaland Holdings.

F&NHB first invested in snacks and drinks manufacturer Cocoaland in 2010 and holds a 27.2% stake in the business, making it Cocoaland’s second-biggest investor.

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In a filing with the Malaysia Stock Exchange, Fraser & Neave Holdings (F&NHB) said it would pay US$111.1million to buy the shares in Cocoaland it did not own.

The Cocoaland board has until 17 June to decide whether to put the proposal to its shareholders.

Publicly-listed F&NHB is a soft drinks and dairy manufacturer marketing products in Malaysia and Thailand. Its brands include 100Plus isotonic beverages and Gold Coin milk.

The company also has a halal-food business, set up after the acquisition of a majority stake in Malaysia’s Sri Nona Group last year.

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Leverage Success, the largest investor in Cocoaland holding just under 40.7% of the business, has given an “undertaking” to vote in favor of the offer, F&NHB added.

F&NHB said the bid is in line with its “ambition to be a stable and sustainable food and beverage leader” in ASEAN markets, “with halal packaged food as its fourth pillar of growth”.

F&NHB said: “The investment will add established Malaysian confectionery and snack brands to F&NHB’s portfolio of renowned brands, and at the same time serves as a platform to build on and expand into other packaged food segments.”

It added: “The addition of Cocoaland will also enhance the group’s expansion in the overseas markets.”

Cocoaland’s product range is made up of snacks, confectionery, and beverage products. Its brands include Mum’s Bake biscuits, Sour+ sweets, and Fruit10 soft drinks.

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In 2021, the company generated revenue of US$47.8 million, down 2.8% from 2020. Just under half the revenue was made in Malaysia.

At the time, Cocoaland said the decline in revenue was due to lower demand for its gummy business in China, the Philippines, and Malaysia, as well as for its snacks in Saudi Arabia.

In its last full financial year, F&NHB booked revenue of US$938.7 million, up 3.6% from the previous year. Operating profit was down 8.3% at US$107.3 million. Net profit slid 3.7% to US$89.7 million. The company pointed to higher commodity, freight, and restructuring costs.

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