Gilinski Secures Control of Nutresa After Prolonged Colombian M&A Battle

After a protracted 27-month acquisition campaign, Colombian billionaire Jaime Gilinski, in partnership with UAE’s International Holding Company (IHC), emerged victorious in the takeover of Colombia’s food behemoth Nutresa. The deal was cemented on February 6, with Nutresa disclosing that Gilinski and IHC acquired a controlling 45.5% stake through a share swap deal worth USD 3.5bn. This strategic move saw financial powerhouse Grupo Sura and industrial heavyweight Grupo Argos divesting their shares in the food and beverage titan, in favor of increasing their holdings in their respective companies—a strategy outlined in a mid-2023 agreement. With this transaction, Gilinski and IHC’s cumulative control over Nutresa has escalated to 76.9%, setting the stage for an impending additional tender offer.

The acquisition marks a significant shift in the Colombian corporate landscape, historically dominated by the Grupo Empresarial Antioqueño (GEA), whose intricate cross-shareholding structures were designed to fend off such takeovers. Nevertheless, through relentless tender offers, legal battles, shareholder meetings, and government interventions, Gilinski and IHC have successfully dismantled these defenses. Prior to the takeover, Nutresa, Grupo Sura, and Grupo Argos witnessed a significant erosion in market value, plummeting by approximately 80% over a decade to a collective worth near USD 7bn, a trend that may render the acquisition favorable for smaller shareholders.

For Gilinski, the 13x EV/EBITDA price tag comes with ambitious expansion plans alongside his UAE associates. IHC, under the stewardship of Sheikh Tahnoon, and media speculation suggests leveraging this partnership to propel Nutresa into competitive markets such as India, Egypt, and Indonesia, positioning it against industry titans like Nestlé and Mondelez. Projections indicate Nutresa’s potential to more than double its revenue to USD 10bn within a few years through organic and acquisitive growth.

Colombia’s status as a key agricultural producer and exporter of coffee, cocoa, cattle, and meat underscores the strategic importance of this acquisition, offering a robust platform for an international food conglomerate. Nutresa’s integration aligns with IHC’s vision of diversifying the UAE’s food supply chains, while the Gilinskis’ strategy focuses on enhancing value through the unraveling of cross-shareholdings.

Deepening their collaborative endeavors, Gilinski and IHC share an investment in Lulo, a Colombian digital bank, with IHC having infused USD 200mn for a 49.9% stake in 2022, underpinning their continued commitment to Colombia’s evolving financial sector.

EMIS alongside leading global law firm CMS, are pleased to have launched the Emerging Europe M&A 2023/24 Report, exploring the trends and data within the region, on both a country and sector basis. Download your complimentary copy.

Original source: EMIS M&A Dealwatch