Turkish Delight: Ferrero Gets EU Commission Approval For Acquisition of Oltan
Turkish Delight: Ferrero Gets EU Commission Approval For Acquisition of Oltan
Italian chocolate maker Ferrero is known for its delicious chocolates and well established Nutella chocolate spread. The group's Nutella product had been hoarded a few months back owing to shortage in the supply of hazelnuts. But things are set to change after the Italian chocolate group has secured the approval of EU regulatory authorities for its acquisition of Turkish supplier Oltan. The Turkish company has long since been a rival with respect to hazelnut production.
With this acquisition under its belt, Ferrero is all set to be the largest hazelnut producer across the globe. The hazelnuts are indispensible for this chocolate maker to create its winning products such as Nutella as well as others like Kinder Bueno, Kinder Surprise and Ferrero Rocher. The European Commission has indicated that it does not have any concerns about the proposed merger as several other suppliers of hazelnut will continue to create strong competition for the company following the merger.
Ferrero is currently run by the family head 89 year old Michele and it has posted revenues of 8.1 billion Euro which is around $ 11 billion in the year ending August 2013. The value of the deal was not announced by the company. Oltan is a genius at marketing and production of hazelnuts and it is the leader in the industry.
With this acquisition, Ferrero may be looking forward to a trouble free innings in the times ahead. The Italian company is based in Piedmont and it has certainly done its math when it comes to this deal. Oltan has revenues of more than $500 million and 5 production plants exporting its products to the EU and other important markets. The deal will be a massive milestone for Ferrero.
Hazelnuts are the key ingredient in all its famous products. This family owned company is unlisted and it has made healthy profits in recent times. A Nutella shortage was widely publicised leading to reports of people hoarding the product. Following the poor harvest in Turkey where 70% of the hazelnut of the world is produced, it is no wonder that the panic which spread among the consumers was of such epic proportions that a statement had to be issued by the company head.
Francesco Paolo Fulci who is the president of Ferrero stoutly defended the charge that there would be a Nutella shortage following the fall in hazelnut production. “We have recurrent crises of this type more or less every ten years and in the past they haven’t been talked about. I ask if some people are looking to raise prices. I hope that this isn’t the case,” he was quoted as saying.
Ferrero buys nearly 25% of the world''s hazelnut for adding 50 hazelnuts to each Nutella jar. Rumors can dent a business. It is good that the company is taking steps to counter this by acquiring the Turkish firm Oltan.
