United Malt agrees to US$1bn takeover deal from Malteries Soufflet
AUSTRALIA – The world’s fourth-largest commercial maltster, United Malt has accepted an AU$1.5 billion takeover offer from French multinational malt house, Malteries Soufflet, which could create the world’s biggest malt producer.
United Malt produces bulk malt for brewers, craft brewers, distillers, and food companies and has processing plants in Australia, Canada, the United States, and Britain.
The acquisition of the Australia-based company that has processing plants in Australiam is part of a strategy by InVivo to become the world’s top malt producer within five years.
InVivo Group is the parent company of Malteries Soufflet and is involved in Agriculture & livestock, pesticide, food & beverage. Malteries Soufflet is also backed by private equity giant KKR.
The takeover will double the size of InVivo’s malt business three years earlier than planned, InVivo chief executive Thierry Blandinieres told Reuters in March when the offer was first made as well as allow Malteries Soufflet to expand its activities geographically and supply new markets, including China and Oceania.
“Joining both gives us a great platform to capture the growth of the beer market,” said Blandinieres, who expects the deal to close around October.
The AU$1.5 billion deal is subject to approval by Australia’s Foreign Investment Review Board and United Malt’s shareholders. If approved, it will see InVivo become the top global producer and supplier of bulk malt for brewers, craft brewers, distillers, and food companies.
Graham Bradley, United Malt chairman, said in a statement that the company’s board believed the AU$1.5 billion offers appropriately reflected the value of its asset portfolio and the anticipated improvement in its near-term earnings outlook.
United Malt sources its malt from some of the finest barley-growing regions across the world, including the Scottish Highlands, Idaho’s Sawtooth Mountains, and the Goondiwindi in New South Wales, Australia.
In the half-year financial results, the United Malt posted a US$13.8 million loss, although it said underlying earnings before interest, tax, depreciation, and amortization had lifted slightly to $52.7 million.
However, management kept the full-year guidance for the 2023 financial year steady at $140 million to $160 million in earnings.
Meanwhile, Malteries Soufflet, one of the world’s biggest malt producers, runs 28 malt houses across Europe, Latin America, Asia, and Africa.
Morgans analyst Belinda Moore said there was a risk Malteries Soufflet, as an industry player, would come back with a reduced offer after United Malt in May posted poor results for the first six months of its financial year.
“We view the offer price from Malteries Soufflet as a great outcome for shareholders given the execution risk involved in delivering [United Malt’s] turnaround strategy over the next few years,” she said in a client note.
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