The acquisition, Numico's first since selling off its supplement activities and reorganizing around infant and clinical nutrition, will give the company a market leading position in the infant milk formula and cereals categories in Finland, and reinforce its position in the Baltics.
"We are very pleased with 'new' Numico's first acquisition. This is an example of our strategy to create leadership positions in selected markets through add-on acquisitions. We acquire two long-standing, successful brands which are poised to offer significant growth opportunities through their leading market positions," said Jan Bennink, CEO of Numico.
The two brands are Tutteli, the leading name in Finland's infant milk formula category, and cereals category leader Muksu. In 2003, net turnover of the brands reached €20 million and operating income around €5 million. A fifth of the revenues are generated through export to the Baltics.
Acquisitions have been expected from Europe's largest maker of baby food since it sold the US supplement business GNC in November last year. But the deal also involves a new collaboration on R&D, supporting comments made by Bennink in a Financial Times interview last year that the firm was 'mulling alliances, particularly for its core baby food unit'.
Valio will also keep its production facilities in Turenki and Lapinlahti (Finland) and continue to produce baby food as a contract supplier to Numico.
The Finnish firm said the sale will help it focus on its core business of dairy foods and functional health products.
Numico's first quarter results suggest that its reorganisation may be paying off, as income trebled to €48 million compared to the previous year. For the full year, it is predicting revenues growth of 6-8 per cent.
The transaction is subject to customary regulatory approvals and is expected to be finalised before the end of the third quarter of 2004.