July 11, 2011 / 6:20 AM / 8 years ago

UPDATE 2-Barry Callebaut sells Stollwerck to Baronie Group

* Group has been trying to sell business since 2009

* Transaction includes long-term supply agreement

* No financial details disclosed

* Shares fall 0.2 pct in weaker Swiss market

(Adds analyst comment, shares)

By Silke Koltrowitz and Nathalie Olof-Ors

ZURICH, July 11 (Reuters) - Barry Callebaut , the world’s largest chocolate products maker, said it would sell its European consumer business Stollwerck to Belgium’s Baronie Group for an undisclosed price.

The group, which makes chocolate for companies such as Nestle and Hershey , has been trying to sell the unit for some time. In 2009, a deal with Spain’s Natra failed as the two companies could not agree on the valuation.

The transaction with Baronie Group also includes a non-exclusive long-term supply agreement for about 25,000 tonnes of chocolate annually that will make Baronie Group and Stollwerck strategic partners of Barry Callebaut, the group said in a statement.

“We are very satisfied that we could successfully conclude the sales process with the Baronie Group,” Chief Executive Juergen Steinemann said in the statement.

“The transaction is fully in line with earlier announcements and our strategy,” he said.

At 0758 GMT, Barry Callebaut shares were trading 0.2 percent lower, underperforming a 0.1 percent rise in the European food and beverage sector index, but outperforming a 0.7 percent drop in the Swiss market .

“This disposal was long awaited and we regard it as positive that Barry Callebaut is now fully focused on the industrial business,” Vontobel analyst Claudia Lenz said.

“We estimate a selling price of around 0.5 times sales or 6 times EV/EBITDA which corresponds to approximately 400 million Swiss francs ($478 million). The disposal will have a positive effect on Barry Callebaut’s margin of approximately 30 basis points,” Lenz said.

Sales revenue of Stollwerck, which includes the Sarotti, Alpenrose, Alpia and Jacques brands, is approximately 500 million euros ($725 million) and volumes sold are more than 100,000 tonnes, Barry Callebaut said in the statement.

The transaction, for which Rabobank International acted as a financial adviser, is expected to close in autumn 2011 and is subject to antitrust assessment. Stollwerck employs about 1,700 people.

Barry Callebaut, which provides the food manufacturing industry with cocoa and chocolate products, coatings and cocoa powders, confirmed its 4-year growth targets and struck an upbeat note on its outsourcing pipeline last month. ($1 = 0.836 Swiss Francs) ($1 = 0.689 Euros) (Editing by Jane Merriman and Hans-Juergen Peters)

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