Cloetta divests its Belgium business
Following the merger with Leaf, Cloetta operates in Belgium through a Belgian distribution company, which primarily distributes brands that are not owned by Cloetta.
The divestment of the distribution company is part of Cloetta’s strategy to focus on its core brands. Katjes will continue to sell and distribute the leading chewing gum brand Sportlife and other Cloetta owned brands in Belgium.
In 2011, Cloetta’s distribution organization in Belgium had approximately 50 employees, and sales of approximately SEK200 milliion (€22.7m), whereof approximately SEK40m (€4.5m) are Cloetta owned brands. The divestment of the distribution company will have a limited effect on Cloetta’s future operating profit, and the purchase price is insignificant compared to the market value of Cloetta. The divestment will incur a non-cash cost of approximately SEK30m (€3.4m) during the first quarter of 2012. However, the transaction will initially be cash flow positive.