America’s Kellogg Company, the leading cereal company in the world, acquired Egypt’s largest cereal producer Mass Food Group in a deal worth approximately $50 million, Kellogg said on Monday.
Mass Food is an “excellent strategic fit” for Kellogg, said Chris Hood, the President of Kellogg Europe in a statement published on the American company’s website.
Alaa al-Bahey, Chairman of Mass Food Group told Aswat Masriya in a telephone interview that the American firm will repay Mass Food’s debts, as well as the $50 million agreed on.
“Kellogg had made a bigger offer for the acquisition but it was reduced since it will repay the debts,” he said, adding that they are “small” debts.
Kellogg will pay for Mass Food Egypt using international cash on hand, the food giant said.
Mass Food, which produces the Temmy’s corn flakes series sold on supermarket shelves across Egypt, was established in 1996 as a family business. The group says it has introduced corn flakes “to the Egyptian household.”Bahey said the Bahey family will partake in managing the company along with Kellogg. The company’s director general will be from the Bahey family, he added.
This is the second acquisition of an Egyptian company by Kellogg this year, after the American firm bought 85.9 percent Bisco Misr.
Established in 1957, the originally state-owned Bisco Misr is one of the country’s main providers of baked goods and confectionery. It owns over 20 production lines for its three baking factories in Cairo and Alexandria.
Bisco Misr’s shareholders agreed to sell a controlling stake of the company to Kellogg in January, after the latter won a bidding battle against Emirati private equity firm Abraaj.
Kellogg Company Chairman and CEO John Bryant said on Monday, “we are building a strong foundation for emerging market growth.”