- McCormick presented a third takeover bid to British company Premier Foods, and while saying 65 pence per share is still too low, there has been some movement. Previous offers of 52 pence and 60 pence per share were rejected.
- Premier agreed to sit down with McCormick and provide financial information McCormick is seeking. This meeting could determine whether the U.S. company will make an offer at what Premier's board called, "a recommendable level" in a recent statement.
- If the deal were to succeed, McCormick would expand its portfolio with popular British brands including Mr Kipling cakes, Bisto gravies, Ambrosia rice puddings, Batchelors soups, and Oxo seasonings.
Prior to these discussions, Premier had voiced plans for expansion of its cake business in the U.S. With McCormick's distribution network, that plan could more easily become a reality for Premier, and it would expand McCormick's portfolio into that segment.
McCormick's portfolio overall would change significantly with this acquisition. While many of the brands complement each other, synergies would also allow internal streamlining and increased profitability, as seen with last year's Kraft Heinz merger.
But the underlying goal of consolidation while identifying key synergies has been constant throughout much of domestic and global M&A in recent years. The processed foods industry as a whole has seen steady sales declines as more consumers turn to options they deem fresher and healthier, so manufacturers are using this strategy to adapt.
Acquisitions have been impactful for McCormick. After buying three companies last year, the company posted a 32% increase in fiscal first-quarter profits earlier this week, driven in part by those acquisitions.
Jissin has complicated McCormick's takeover attempts by buying a higher stake in Premier. Jissin raised its stake from the 17.3% it bought from private equity firm Warburg Pincus last week to 19.9%, according to a regulatory filing. Nissin is now Premier's largest stakeholder and is expected to be given a seat on Premier's board.
April 20 is the last day a final offer can be made.