M&A
June 21, 2022
3 minutes read

Food Giant Mondelez To Buy Energy Bar Maker Clif Bar For $3B

Mondelez International (NASDAQ: MDLZ), the American food & beverages giant, is not slowing down on its dealmaking spree. It has…

Mondelez International (NASDAQ: MDLZ), the American food & beverages giant, is not slowing down on its dealmaking spree. It has reached a deal to buy Clif Bar & Company, a well-known maker of energy snack bars and drinks. Mondelez will pay at least $2.9bn for the privately-held company, marking its second acquisition this year and seventh in the past three years.

You may not know Mondelez by name, but you likely consume some of the company’s products. Have you ever eaten a Cadbury or Toblerone chocolate bar, an Oreo cookie, a Ritz cracker, or a Tuc biscuit? If so, you’re a Mondelez customer. Soon enough, you may become one by eating a Clif energy bar.

In 2021, the company reported a $4.3bn net profit on $28.7bn in sales. That same year, it returned $3.9bn to shareholders through dividends and stock buybacks.

Since Mondelez’s current CEO, Dirk Van de Put, took over in 2017, the company has spent heavily on acquisitions to expand its turf. Clif Bar represents its most expensive purchase so far. With the company under its belt, Mondelez’s global snack bar business will have over $1 billion in annual sales, boosting its position in the market by a wide margin.

Clif Bar has an intriguing history. It was founded nearly three decades ago (in 1992) by Gary Erickson and Lisa Thomas. In 1999, the founders reportedly turned down a $120mn acquisition offer from the Quaker Oats Company, a food conglomerate now owned by PepsiCo (NASDAQ: PEP). That decision seems wise considering the $2.9bn plus unspecified contingent earnouts Mondelez is paying for the company about two decades later.

In a 2017 interview with the San Francisco Chronicle, Erickson emphasized that Clif Bar wasn’t for sale and had already rebuffed multiple suitors. But, we can see that almost everyone has a price they can’t refuse.