GraceKennedy Limited will merge Consumer Brands with its other distribution subsidiary World Brands, once the acquisition closes later this year, adding $2 billion more revenue to the group in the process.
The conglomerate is taking over 100 per cent of Consumer Brands Limited from Athol Smith and his company Sphinx Investments. The acquisition price was not disclosed.
The deal is expected to close by the end of the third quarter, giving GraceKennedy access to the Procter & Gamble products distributed by Consumer Brands since 1992. The company also distributes brands for another 10 local and international entities.
GraceKennedy group CEO Don Wehby said Consumer Brands will become a subsidiary of GraceKennedy Foods, and eventually it will be merged with World Brands. Smith, will remain as adviser during the transition period, Wehby said.
"We bought the company as a going concern and ultimately Consumer Brands will be merged with our World Brands division," said Wehby. "Athol Smith has been retained by me for two years and he will play a vital role in the process of integration to oversee the transition," Wehby said.
Smith was not reached for comment on why he sold the business that Wehby has said is "very profitable".
GraceKennedy, a food and financial services conglomerate, is now valued at $88 billion by revenues. Its World Brands business currently distributes around 85 brands for local and international companies. Its revenue contribution to the group is unknown.
ADDING 20 BRANDS
Consumer Brands will add another 20 brands to the company's distribution portfolio, inclusive of P&G products Charmin, Bounty, Ariel, Downy, Tide, Always, Tampax, Pampers, Febreze, Crest and Olay.
Wehby dismissed the prospect of cannibalising the markets for the products the conglomerate already distributes.
"We've gone through line by line and compared all the products that we have and there will be no conflict," he told Gleaner Business.
The GK boss said the Consumer Brands deal aligns with GK's announced push for growth, while signally that more acquisitions are likely.
"We did say at the AGM that our growth was going to be by acquisitions. We now have a sixth manufacturing plant in Denbigh and we are announcing Consumer Brands, and there are certainly others that we are considering," he said.
The conglomerate announced last week that it is investing $215 million in a new factory in Denbigh, Clarendon that will package frozen foods for sale in Jamaica and overseas, starting next year.