PARIS: Swiss-Irish bakery group Aryzta has completed its acquisition of a 49pc stake in French retailer Picard in a deal worth €446.6m.
The investment, which was first announced in March, was followed shortly after by the announcement that Aryzta had sold off a large stake in Irish agricultural services business Origin Enterprises. It raised over €400m from the sale, a large part of which has gone towards funding the Picard investment.
Picard specialises in breads, pies and desserts. It had a turnover of €1.37bn last year and is now valued at €2.25bn. Picard has a strong retail presence in France and commentators said that Aryzta may want to internationalise the brand.
When the deal was first revealed it was announced that Aryzta would have the right to exercise a call option in three to five years to acquire 100pc of Picard.
Picard will be treated by Aryzta as an associate and will be expected to make a net contribution of 3pc to underlying EPS on an annualised basis, offsetting half of the negative 6pc impact of the Origin placement.
It will be separately managed and separately funded with debt non recourse to Aryzta. Aryzta will have two seats on the Picard board.
The move has been the subject of criticism from some analysts, who have questioned the rationality of acquiring a minority stake in the business and Aryzta’s entrance into the non-bakery sector.
Earlier this month analysts at global bank Societe Generale said that the Cuisine de France owner could take a number of measures to “accelerate the rebuilding of management’s credibility with investors”, with one of their suggestions being that Aryzta could walk away from the deal.
A spokesman for Aryzta said that Picard “is a food business, which is adjacent and has complementary aspects to our French business”.
He added: “We believe at some point in the future it will consolidate the French business. We believe it does make sense – it’s a repositioning of the investment in Origin into an adjacent food sector.” Shares in Aryzta were down by 3pc in mid-afternoon trading on the Irish stock Exchange.
