Glory | Gloria buys Soprole in Chile: what comes for the Peruvian holding company with this acquisition? | Blow | Chile | dairy| acquisitions | ECONOMY

The transaction for the dairy giant will be for US$210 million as the value of the shares- as reported Gloriathrough Gloria Foods, to the Superintendency of the Stock Market- plus the cancellation of a debt to Fonterra and other transactions in the process, which will lead to the final amount being around 591.07 billion Chilean pesos (US $641.3 million), as reported Soprole to the Commission for the Financial Market, in Chile.

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“In addition to the purchase and sale of shares, the operation considers the repayment of a loan owed to Fonterra. […] The Fonterra divestment process comprises several transactions for a total amount of 591.07 billion Chilean pesos (US$640.27 million)”, said Gustavo Rencoret, manager of Legal and Corporate Affairs of Soprole. The final price will reflect capital gain taxes, working capital adjustment, costs associated with exchange rate hedging, and other costs associated with the transaction, according to the terms and conditions of the SSA.

Gloria has more than 70% of the dairy market in the country.


As recalled, the New Zealand cooperative Fonterra put the dairy company – which it had in its ranks for three decades – up for sale in September 2021 to focus on its operations outside of South America and on New Zealand milk.

This sale process, led by the investment banks JP Morgan, UBS and Jarden, had several stakeholders. And earlier this month, it was learned that the Peruvian holding company was one of the four bidders that were in the running for Soprole. At the forefront, as reported by the “Diario Financiero” (Chile), would have also been the French company Lactalis, the canadian Known and a company of Chinese origin, whose name was not confirmed.

The Soprole company was born in 1949 in Chile, and for 30 years it has belonged to the Fonterra dairy cooperative.

The Soprole company was born in 1949 in Chile, and for 30 years it has belonged to the Fonterra dairy cooperative.

Although everything is on track for this purchase to be completed, certain conditions stipulated in the contract have to be met. Among them is the authorization from the National Economic Prosecutor’s Office (FNE) of Chile and the launch of a Public Offer to Purchase Soprole Shares.

The Fonterra’s CEO, Miles Hurrell, assured the Chilean media that “compliance with the conditions precedent is expected within a period of six months. (…) Fonterra is pleased to transfer the Soprole business to a new owner committed to a strong regional focus on growth.”

How does Gloria face this purchase?

César Romero, Head of Research at Renta4 SAB, indicates that the resources used by Gloria in the short term consist of US$200 million; however, the total value is higher as it is a large purchase, so its financial structure would be under pressure for the next two years. At this time, he recommends that they not resort to acquisitions of market leaders such as Soprole, whose assets were valued at US$527 million, until June 2022.

The company’s debt, for the third quarter of 2022, is 99% and after the acquisition this would lead to at least 199%, only counting Gloria; even without Soprole.

Regional focus and strategy

Three years ago, Claudio Rodríguez, executive director of milk glory, He commented to this newspaper that they had regional consolidation as their objective. “AWe tend to be one of the largest dairy groups in Latin America, we compete with ‘monsters’ like Nestlé or Lactalis“, said. The purchase of Soprole could accelerate this plan.

According to Euromonitor International, the company – which has 15 brands under its umbrella in Chile – It has 20.2% of dairy and alternative consumption in the Chilean market this year, and leads the ‘retail’ channel. Furthermore, in its latest 2021 Sustainability Report, Soprole stresses that it has 29.3% of the market whole in Chile.

Claudio Rodríguez, executive director of Leche Gloria.  (Photo: Alessandro Currarino)

Claudio Rodríguez, executive director of Leche Gloria. (Photo: Alessandro Currarino)

/ Alexander Currarino.

For José Carlos Lumbreras, R&D manager of Peru Top Publications, this was a great opportunity that opened up for Gloria in the Chilean dairy market, as it is a large and consolidated company, and she took advantage of it to enter the southern dairy market.

As recalled, Gloria landed in Chile in 2020 but to the cement business, through its subsidiary Yura Chile, by purchasing a stake in Cementos Bio-Bio.

José Ruidías, professor of marketing and sales at Pacífico Business School, meanwhile, considers that it was a rather well-analyzed decision, since they do not make as many purchases as other mass consumption firms in the country. “The Rodríguez culture is about being cautious and not taking very risky steps, which is why you don’t see so many large-scale purchases. In food, they have made small purchases, this is one of the largest ”, he claims.

Possibly, he comments, this is the beginning of a more aggressive growth plan. “It is a strategic move, since mass consumption companies in Chile are one step ahead in hyper-segmentation proposals and value-added trends, which can be integrated into Gloria. This contributes a lot to his internationalization plan, to become a regional player and compete with the great Colombian or Argentine”, he adds.

The CEO of the company comments that “The opportunity to incorporate a company of the category of Soprole to our business portfolio will be a source of pride for our food holding”. Also, highlights the firm’s leadership in Chile, as well as its excellence in brand development and innovation, that will allow synergies to be built.

What kind of synergies will Gloria and Soprole have?

Ruidías indicates that Gloria is a very jealous brand, that it is very difficult for other brands to coexist with it, so he would not know if Soprole could have opportunities in Peru or Gloria as a brand in Chile, but he has no doubt that what will be seen rapidly is an acceleration in innovation.

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Romero, from Renta 4 SAB, points out that Gloria enters Chile with a highly recognized brand, which already exports to Mexico and is the largest exporter of cheese in Chile. Gloria would focus on generating synergies with the markets to which it exports Soproleprojects.

At different stages of progress, Gloria It has a presence in Bolivia, Puerto Rico, Colombia, Ecuador, Uruguay, Argentina and Peru.


Soprole presence

Collection of milk _ According to the National Federation of Milk Producers (Fedeleche) of Chile, after Colún, Soprole is the second largest buyer of milk from suppliers in the country, with a 22.7% share in transactions, reports Diario Financiero.

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