December 12, 2012 / 6:55 AM / 5 years ago

UPDATE 1-Barry Callebaut to buy Petra Foods cocoa unit for $950 mln

* Deal to buy largest cocoa products supplier in Asia

* Barry Callebaut flags up to 25 mln Sfr integration costs

* Supports Barry’s aim for further outsourcing agreements

ZURICH, Dec 12 (Reuters) - Barry Callebaut said on Wednesday it would buy the cocoa ingredients business of Singapore-based Petra Foods for $950 million in cash, making the Swiss firm the world’s largest processor of cocoa.

Barry Callebaut, which manufactures chocolate for Nestle and Hershey, is buying the operations in a bid to support further partnerships with big confectioners.

Barry Callebaut also said the deal would boost sales volumes in the fast growing emerging markets by 65 percent, taking its share of total sales volume to a third.

Petra Foods is the largest cocoa products supplier in Asia with sales of $1.3 billion in 2011.

Integrating the Petra Foods unit into Barry Callebaut will result in estimated one-off costs of 10 million to 15 million Swiss francs ($11 million - $16 million) in the first two years, the company said, with an additional one-off transaction cost of 10 million francs.

The proposed acquisition includes Petra’s entire cocoa ingredients business, including seven factories in Malaysia, Indonesia, Thailand, Brazil, Mexico, Germany and France as well as sales offices in Singapore, the Netherlands and the United States.

The deal also includes an agreement to supply Petra Foods with cocoa products covering 75 percent of its needs.

The company said the deal would be financed by a bridge loan from banks that will be replaced after a year by a combination of equity and debt issuance.

Barry has signed a string of outsourcing deals this year, including supplying the world’s third largest consumer goods group, Unilever with 70 percent of its global cocoa and chocolate needs.

Swiss investment bank Credit Suisse advised Barry Callebaut on the transaction.

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