Newlat resumes £700m takeover attempt of Princes Group

The Italian agri-food group Newlat Food has again decided to make acquisitions Princes Group based in the UK With Mitsubishi Corporation.

The £700m deal represents a major consolidation step after negotiations stalled earlier this year.

Newlat’s intention to acquire Princes was initially revealed in December 2023, when the Italian company announced it was in “very advanced” talks to buy the British food and drink supplier.

At the time, Newlat was competing with British buyout company Epiris, with Mitsubishi demanding a price of £400 million. Newlat CEO Angelo Mastrolia emphasized the strategic value of the acquisition, noting that it will create significant value for all stakeholders.

However, negotiations ended in February 2024 when Mitsubishi rejected Newlat’s revised proposal. This revised offer takes into account lower demand and challenging pricing dynamics in the UK market. Despite the setback, Newlat expressed a willingness to reconsider the deal if Mitsubishi reconsiders its stance.

Simon Harrison, CEO of Princes Group, commented on the resumption of acquisition talks: “This is an exciting prospect for Princes and we are delighted that Newlat shares our confidence in the Group’s strategic growth plans, brand strategy, operational excellence and people culture. The planned sale remains an ongoing process and further information will be made available in due course.”

Princes is one of the UK’s largest food and drink groups, based in Liverpool, UK. With a global supply network and a diverse portfolio of branded and private label products, Princes operates extensively throughout Europe, with facilities in Poland, Italy and Mauritius, among others. Key brands within Princes include Flora sunflower oil and the Napolina range of Italian-style sauces and ingredients.

Newlat Food, listed on the Milan Stock Exchange, specializes in dairy products, baby food, pasta, bread, gluten-free products and instant hot snacks. The company operates in Italy, the UK, Germany and France through subsidiaries such as Centrale del Latte d’Italia and Symington.

Following the acquisition, the name of the combined entity will be changed to New Princes Group, with Princes Limited retaining its identity as a UK-based subsidiary.

The merger will create a significant player in the European food industry, with projected revenues of approximately EUR 2.8 billion and adjusted EBITDA of approximately EUR 190 million. The New Princes Group will have 31 factories and offer a diversified product portfolio in 10 different categories.

The management board anticipates significant growth, with the goal of increasing the group’s turnover to EUR 5 billion by 2030. This growth is expected to result from the use of combined expertise, commercial networks and the exploitation of cost and structural synergies.

The transaction is subject to several customary regulatory approvals, finalization of the Group’s audited financial statements and consultations with the European and Dutch Works Councils.