Mondelez CEO Irene Rosenfeld quits amid buyout buzz

Dirk Van de Put, currently with Canadian major McCain Foods, to take over as new chief executive

Mondelez International’s long-standing chief executive officer, Irene Rosenfeld, will step down in November, the company said. Allowing a new chief executive, Dirk Van de Put, currently with Canadian major McCain Foods, to take over.

The announcement comes when speculation about a possible takeover by the Warren Buffett-led Kraft Heinz has been growing. FT Dealreporter said Kraft Heinz was now pursuing Mondelez, though the company did not confirm or deny the news globally.

Rosenfeld, with the company for 11 years, will continue as chairman of the board of directors till March 31, 2018, at which point she will retire.

Speculation about Kraft Heinz and Mondelez coming together has been doing the rounds since the former's audacious bid for Unilever in February failed. Mondelez itself was looking to acquire Hershey’s last year, which did not materialise, pushing it closer to Kraft Heinz, analysts and sector experts have said.

Mondelez, earlier part of the larger Kraft Foods, was demerged from the latter in 2012, as it sought to create a ‘snacks powerhouse’, led by brands such as Cadbury, Oreo, Tang and Toblerone. The residual North American grocery business remained in Kraft Foods, which later merged with Heinz, the sauce maker, to form Kraft Heinz in 2015. This transaction was led by Buffett and private equity major 3G Capital. Together, they pumped $10 billion into the deal. The bid for Unilever was even bigger at $46 billion and would have pushed the combine of Kraft Heinz-Unilever to number two spot in the pecking order of global foods companies, after Nestlé.

At a broader level, mergers and acquisitions have long  been viewed as  the preferred route to gain size and scale, especially in the US and other developed markets. Consumer goods, beside sectors such as banking and finance, are some of the most visible areas where this strategy has played out, with implications for their subsidiaries across the world. 

India angle

A merger of Kraft Heinz and Mondelez will mean the two companies bring all their brands together under one roof and push it aggressively in a market most multinationals consider as key. The two companies are expect to harness synergies, more so Kraft Heinz, which is smaller than Mondelez, the largest chocolate maker in India.

During its second-quarter earnings call on Wednesday, Mondelez’s finance head, Brian Gladden, said several emerging markets were stabilising and had an improving macro outlook. “We are delivering solid results in countries such as India, Vietnam and Mexico, where market fundamentals are improving and our momentum is strong.”

Rosenfeld reiterated this on the call, saying she saw improved trends in Europe and across many of her firm’s emerging markets. 

For the three months ended June 30, the maker of Oreo cookies and Cadbury chocolates earned $498 million or 32 cents per share. A year before, the company earned $464 million or 29 cents per share. Earnings, adjusted for restructuring costs and one-time costs, were 48 cents per share. This was better than the 46 cents per share the Street had estimated.

While revenue declined to $5.99 billion, from $6.03 billion earlier, for the quarter, this was hampered in part by a malware incident in June that impacted shipments.

NEW ORDER

McCain Foods CEO Dirk Van de Put

• Dirk Van de Put, CEO of McCain Foods, to replace her

• Announcement comes when speculation about a possible takeover by the Warren Buffett-led Kraft Heinz has been growing
• FT Dealreporter said Kraft Heinz was now pursuing Mondelez, though the company did not confirm or deny the news