Nomad Foods Limited announced that it has entered into an agreement to acquire Fortenova Group’s Frozen Food Business Group (FFBG) for approximately EUR615m on a debt-free, cash-free basis. FFBG is a leading European frozen food portfolio operating in attractive markets new to Nomad, including Croatia, Serbia, and Bosnia & Herzegovina, Hungary, Slovenia, Kosovo, North Macedonia, and Montenegro. Its two anchor brands, Ledo and Frikom, have unparalleled consumer awareness and #1 market share in many of these markets and offer a broad range of frozen food products including fish, fruits, vegetables, ready meals, pastry, and ice cream.
According to Noam Gottesman, Nomad Foods’ co-chairman and founder, the transaction will provide a natural extension to Nomad Foods’ existing business and create a new platform for future expansion within Central and Eastern Europe. It also introduces the company to ice cream, a new category that opens potential avenues for growth. “Following the acquisition, our annual revenue will approach EUR3bn, nearly doubling the revenue base of Iglo Group, our initial anchor acquisition in 2015. We are proud of what we have accomplished so far, and we believe there is much more to come. We look forward to welcoming the FFBG team into the Nomad family,” Gottesman added.
In a strategic move, Nomad Foods Ltd. acquired Croatia’s largest frozen food manufacturer and distributor, Ledo d.d. This means that the popular brand with the white polar bear has now changed owners, which will have larger implications in the region but also for Nomad Foods, Roland Száki, analyst at Euromonitor International points out.
“Ledo is a well-established, successful brand mainly in Southeast Europe that enjoys a market-leading position in multiple categories (such as ice-cream, processed meat, and seafood,) across many countries (like Croatia and Serbia). The company’s strong distribution network will enable Nomad Foods to gain a foothold in countries where their reach was either limited or non-existent while also providing them with a large portfolio extension,” Száki says. “It remains to be seen how the new western ownership will handle the freshly acquired brands, but it is safe to assume that Ledo as ice cream will not disappear but continue to prosper given that it is a new business area for the company. Having said that, Nomad Foods’ own brand Iglo might enjoy priority in processed fruit and vegetables as a means to utilize the wider distribution network and geographical reach. From a food and nutrition perspective, personally, I would like to see how the company will capitalize on the dynamic development of ready meals. It is true that the category of frozen ready meals is quite mature in both Eastern and Western Europe, but perhaps along with the rising need for convenience, exporting local dishes may serve as a cultural exchange that can reinvigorate both interest in these products and the trend for the internationalization of food,” the Euromonitor International analyst concludes.