Strauss brews sale of Russia coffee activity - Israel Business, Ynetnews

   Israel News

Israel News
World News
Israel Opinion
Israel Business
Israel Culture
Israel Travel
Calcalist Exclusive

Strauss Chairwoman Ofra Strauss Photo: Sivan Farag
Strauss Chairwoman Ofra Strauss Photo: Sivan Farag

Strauss brews sale of Russia coffee activity

Food corporation's coffee operations are second largest in Russia, with 13% market share and about NIS 400 million in earnings for H1 2012. Strauss could gain over $200 million from agreement

Golan Hazani, Calcalist
Published: 10.29.12, 12:02 / Israel Business

Israeli food corporation Strauss Group, controlled by the Strauss family, is conducting negotiations for the sale of its coffee activity in Russia, Calcalist has learned.


Coffee is one of the Strauss Group's fastest growing activities. If a deal is signed, Strauss is expected to gain over $200 million.


Strauss, Richard Branson join forces / Mishel Udi, Calcalist
Virgin's investment fund to invest $7.5 million in Strauss Water's business expansion to England and Ireland, targeting France, Australia and South Africa for later expansion
Full story
Negotiations are underway with a strategic buyer, according to estimates, possibly one of the heavy hitters in the coffee market, such as Nestle, Kraft Foods or Sara Lee. The parties have yet to sign an agreement and are currently conducting due diligence.


The group's coffee activity in Russia is concocted by Strauss's coffee subsidiary, in which Strauss Group holds 75% and TPG Capital – which invested $293 million in the company in 2007 – holds 25%.


The reason for Strauss's decision to sell is unknown and it is estimated that the company received acquisition offers. As the Russia coffee market is lucrative for Strauss, which is the second largest player on that market with a 13% market stake, the initiative likely did not come from the group.


Strauss's coffee activity in the Russian market amounted to a mere $20 million in 2007, but has grown significantly since. On the first half of 2012, the company's sales in Russia and FSU countries amounted to NIS 398 million (about $103 million), with estimated annual revenues of NIS 800 million ($206 million).


Strauss said in response to this report, "The group routinely negotiates with many parties in the food and beverage industry and does not comment on reports regarding such negotiations."


This report was originally published in Hebrew by Calcalist




commentcomment   PrintPrint  Send to friendSend to friend   
Tag with Bookmark to

1 Talkbacks for this article    See all talkbacks
Please wait for the talkbacks to load


RSS RSS | About | Contact Us | Privacy Policy | Terms of use | Advertise with us | Site Map

Site developed by  YIT Advanced Technology Solutions