Dairy Crest, the UK’s leading dairy foods company, is to commence a strategic review of St Hubert, its French branded spreads business. The review will evaluate all possible options available to Dairy Crest to maximise shareholder value, including a potential divestment of St Hubert.
Since its acquisition in January 2007, St Hubert has been a successful part of the Dairy Crest group and has consistently increased its market share and profitability. However, Dairy Crest has been unable to make additional synergistic acquisitions in Continental Europe as it envisaged at the time of its acquisition of St Hubert and it believes that greater value may be generated for shareholders through the consideration of all the available options for St Hubert.
A disposal would reduce Dairy Crest’s debt and provide it with a number of alternatives which include releasing some proceeds to shareholders, investing in its core business and making strategic acquisitions of branded businesses in the UK. This would further improve Dairy Crest’s strong position in the consolidating UK dairy market. Any acquisitions would be synergistic and made within strict financial criteria, as will any decision over the future of St Hubert.
Whatever the results of the review, Dairy Crest will continue to develop its broadly based UK business including its strong portfolio of brands (Cathedral City, Country Life, Clover and Frijj). The Dairy Crest board also intends to continue with its progressive dividend policy.
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