Belgian Chocolates to Resurface as Turkish Delights
The opulent & exquisite world of Belgian pralines & truffles are about to mark their dominance in the land of Turkish delights. Godiva, a Belgium chocolate business renowned for its premium quality chocolate delights was officially sold to Y?ld?z Holding, the owner of Turkey's 61 year old Ulker Group, a biscuit & chocolates conglomerate, for $ 850 million. The same was confirmed later when the Chief Executive Officer (CEO) of Yildiz Holding shared the acquisition story with journalists recently.
This deal was greeted as a welcome surprise, just ahead of the Feast of Sacrifice (Eid ul Adha), giving the confident Turkish economy, a chocolaty outlook than ever.
Godiva, a premium chocolate business, was owned by the Philadelphia food company, Campbell South since 1974. It was put on sale when a strategic review reported that exotic luxuries like chocolates were strategically unfit for a company engrossed in mass-market products.
Godiva was bidded for by major international food giants and conglomerates, like Hershey, Mars, Nestle and Lindht but Ulker Group, the largest consumer goods company in the Turkish Food Industry, with an assortment of biscuits, cookies, chocolates, confectionery, beverages & dairies to offer, stood tall when the official verdict was out.
According to industry analyst Food Business Review closure on the deal is expected to happen in the next few months subject to customary closing conditions supplemented by the requisite regulatory approvals. Post that, Godiva will be an official entity of the Ulker Group.
This acquisition is a definite achievement for Ulker Group and in line with their business strategies of expanding vertically through mergers & acquisitions rather than growing horizontally. Amid global fluctuations, this business deal came at an economically viable time and will facilitate the Ulker Group to diversify its portfolio and reinstate its brand image through an international name in the regional and global markets.
Although Y?ld?z Holding prides in its extended operations in packaging, industrial products, finance, telecommunications, and other sectors, its soul and leading brand remains in the Ulker Group. The 'Ülker Division' is responsible for the Group's core businesses, including cookies, crackers and chocolates. The Division is the mainstay of the Group, handling various additional and related product categories like cakes, flour, chewing gum and baby food.
It is renowned for achieving the highest level of quality for its products and is attested by the fact that Ulker Group was conferred with the "Candy Company of the Year in Europe" award from the European Candy Kettle Club in 2004.
'Work hard, stay humble, respect the consumer and stay abreast of the times.'
Simultaneously, the Food Division of the Ulker Group has been aggressively involved in the production and management of the Group's oil and fats, soft drinks, dairy products, starch & ready-made food products.
Quoted as per the official site, Ulker group has expanded into 7 divisions, internationally exporting to over 95 countries.
The corporate family ratings of Ulker Group were revised from B1 to Ba3 in October this year by Moody in light of the company's solid position in the local food market, its high profitability, strong financial metrics and adequate liquidity position.
Bearing Ulker's growth and vision in mind, this deal is being viewed as a success story for the Turkish economy since $ 850 million is the largest amount of money a Turkish firm has ever paid in acquisition of a foreign firm.
Ülker's Biscuits, Chocolate and Cake division President Ali Ulker said that the purchase of the world-renowned brand Godiva was a step towards the company becoming a regional power since it already holds dominance on the Turkish territory. According to the Ulker's Corporate Relations Director General, Zuhal Seker Tucker, Ulker is undoubtedly the market leader in the Turkish chocolate industry holding a market share of 60%.
The centre-stage of this take-over would primarily be Ulker Group's dauntless entry into the global markets. A company which has strong roots and brand presence in the Middle East and Turkish Republics would pave a new route to the global markets through Godiva. Hence, the management of Yildiz Holding is planning to establish a joint Turkish-American board of directors' panel for Godiva to shed new perspective and light but simultaneously ensuring retention of the brand's soul.
Commenting on when Turkey would witness the launch of the first Godiva boutique, Yildiz Holding CEO, Atilla Kurama commented that Yildiz Holdings viewed Godiva as a stand-alone company and would continue to treat it like that. However, one of the first outlets would be seen in Istanbul shortly post the handover process.
Ulker Group & Godiva Acquisition
Ulker Group, the largest consumer goods company in Turkey started operations as a small bakery in Istanbul. Today, it prides in exporting internationally to 95 countries. It is publicly traded on the Turkish Stock Exchange.
One of the newer products launched by Ulker was COLA TURKA, which was an instant success when introduced in the Turkish market in 2003. According to local sources, Coca Cola had to slash prices by 10% due to the launch and subsequent success of COLA TURKA.
The recent credit crunch for the weakening dollar and appreciating Turkish Lira paved way for Campbell South's sale of Godiva to Ulker Group.
Hershey, Mars, Nestle, Lindht and other major food giants were also keen on the take-over but Eti Group was considered to be Ulker's main rival for this business proposition.
Campbell South has been banking heavily on marketing strategies for endorsing a healthy lifestyle, promoting soups & snacks and luxury chocolates were strategically a misfit, leading to Godiva's sellout.
Currently, Campbell is focusing on healthier soups, goldfish crackers and v8 juices in the US while simultaneously working up sales of broth in China and Russia.
By Zainab Mansoor
© Dinar Standard 2008
