Nestle takes majority stake in Turkish buscuit company
Swiss food conglomerate Nestle said Monday it had acquired a majority stake in Turkish confectionery brands Dogan and Balaban Gida as it seeks to expand in the low-income segment of the market.
Nestle did not disclose financial details concerning the acquisition of a 51 percent stake, which it said was part of its strategy to expand its offering of products specifically created for lower income consumers.
"Nestle will partner with Dogan and Balaban Gida, national producers of popular biscuit, chocolate and wafer brands, to create more affordable products for shoppers at the bottom of the pricing pyramid," the company said in a statement.
Nestle estimated that in Turkey this segment accounted accounted for half of the total confectionery sector, valued at around 3.6 billion Turkish lira (1.8 billion euros, 2.3 billion dollars) per year.
The Swiss company said the acquisition will help it gain new production capabilities, an important element as its products targeting the low-income market are manufactured from local raw materials to minimise value chain costs.
The takeover is still subject to regulatory approval.
© 2010 AFP