Nomad Foods is set to purchase Birds Eye maker Iglo, in a deal estimated at €2.6bn.
The news comes after a disappointing 2014 for Iglo, which reported net sales broadly flat year-on-year – declining by 1.9%. The results published 26 February, led Iglo Chief Executive, Elio Leoni Sceti to comment, “Market conditions will continue to be tough in 2015”.
The firm‘s ‘Birds Eye’ brand saw its sales fall by 7% last year, with fish finger sales, as a whole, declining by over 2% as consumers moved on to other fish alternatives.
However, this has not put Nomad Foods off, with founders Martin E Franklin and Noam Gottesman preparing to take over from Permira, a private equity firm, which will continue to hold a 9% stake in the company.
Although 2014 was not the company’s strongest year, Nomad Foods should be pleased with the global credentials of the company. Iglo currently produces, markets and distributes its products in 11 different countries across Europe, its website claiming that it’s the market leader in seven of those.
Nomad Foods will have to stay on top of Iglo’s sustainability campaigns, after the company announced in March that it would be investing £3.7m in pan-European iFreeze campaign to reduce food waste. Sceti believes innovation is fundamental to the company’s growth in 2015:
“In the UK our new Inspirations platform has been judged by Kantar to be the biggest FMCG product launch of 2014, reflecting the success of our big initiatives. We are focussed on building a nimbler and more competitive business and the momentum that we have established will continue to help mitigate the effects of the overall economic environment.”
It is understood that Nomad Foods’ purchase of Iglo could be announced as early as today, with Sceti reportedly stepping down from his role as Chief Executive in June. He will stay involved in the company as a Non-Executive Director.