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Suntory arm to pay over $8M penalty; Third Point urges Campbell Soup to sell biz


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Essential IR Insights Newsletter - Summer July-August 2023

Suntory arm to pay over $8M penalty; Third Point urges Campbell Soup to sell biz


* Illinois-based Beam Suntory Inc., owned by Japanese soft drink company Suntory Beverage & Food Ltd., agreed to pay more than $8 million to settle improper payment allegations against its Indian arm, a violation of the U.S. Foreign Corrupt Practices Act. Without admitting or denying the charges, the company, which owns the Jim Beam bourbon whiskey brand, was ordered to pay $5.3 million in disgorgement fees, $917,498 in prejudgment interest, as well as a $2 million civil penalty. The company's Indian unit came under fire for allegedly bribing government officials in India to make inroads into the country's highly regulated liquor business.

* Activist investor Daniel Loeb, CEO of Third Point LLC, is pushing for Campbell Soup Co. to focus on a sale of the company instead of exploring other options, the New York Post reported, citing sources familiar with the development. Loeb's hedge fund reportedly is in discussions with family members who own about 41% of the New Jersey-based packaged food producer to back a plan that would result in engaging with a bank for a potential sale of Campbell Soup.


* Italian coffee company Luigi Lavazza SpA acquired Australian coffee machine supplier The Blue Pod Coffee Co. for an undisclosed amount. The acquisition of Blue Pod, which has been the exclusive distributor of Lavazza products to Australian offices, continues a string of purchases by the coffee product manufacturer that allow it to increase sales, Reuters reported. Company officials could not be reached for comment regarding the possible impact of the deal on revenue or the deal's value.

* Anheuser-Busch Inbev SA/NV's German unit resumed talks to sell its German beer brands, Hasseroeder and Diebels, after its deal with financial investor CK Corporate Finance faced delays, Reuters reported, citing a statement from AB Inbev Deutschland. The company said the investor could not meet the contractual conditions to close the deal by mid-2018. AB Inbev is in discussions with interested parties for a possible sale of the two brands along with their associated breweries, the report said.


* Archer Daniels Midland Co. entered exclusive talks to buy French animal nutrition producer Neovia, a unit of agricultural cooperative Union InVivo - Union de Coopératives Agricoles, in an all-cash deal with an enterprise value of about €1.54 billion. Neovia, which employs about 8,200 workers and posted global sales of €1.7 billion in 2017, would help the U.S. agricultural giant boost its animal nutrition business through its 72 production facilities in 25 countries.


* Flowers Foods Inc. appointed Ryals McMullian to the company's newly created COO role, effective June 27, after serving as the company's chief strategy officer since May 2017. As COO, he will be tasked with overseeing the Georgia-based company's fresh packaged bread and snacking/specialty units, supply chain and sales.

* Nestlé SA listed its accomplishments in the past 12 months after activist investor Third Point LLC recommended a breakup of the foods giant. In a post added to the Swiss company's website, Nestlé said it had accelerated the repositioning of its portfolio, touted a $7.15 billion agreement with Starbucks Corp. and highlighted its return of over CHF10 billion to shareholders in 2017. Separately, The Wall Street Journal reported that Nestlé is in talks to buy a majority stake in Canada's Champion Petfoods for more than $2 billion in a move that could help the Swiss foods giant bolster its pet food operation.

* Nomad Foods Ltd. completed its €240 million acquisition of Aunt Bessie's Ltd., which included the transfer of the frozen food producer's facility in Hull, England, from William Jackson & Son Ltd. The Feltham-based manufacturer added that it completed a €260 million increase in its existing term loan facilities.

* Unilever PLC completed the sale of its global spreads business, which includes the brands Flora, Country Crock and I Can't Believe It's Not Butter, to private equity firm KKR & Co. after striking the €6.83 billion deal in December 2017. KKR's purchase excluded Unilever's spreads business in South Africa, which was part of a separate transaction made in September 2017 with South African investment holding company Remgro Ltd. However, the July 2 statement also announced the completion of that deal, under which Unilever acquired Remgro's 25.75% stake in Unilever South Africa Holdings (Pty) Ltd. in exchange for the South African spreads business and a cash consideration of 4.9 billion rand.


* Whitbread PLC plans to simplify the management teams in its restaurant business to align its structure with industry norms and create a "more efficient and effective" organization, the company said in an emailed statement to S&P Global Market Intelligence. Although the company's proposed changes would result in a number of managers leaving the business, Whitbread is consulting with the affected employees and "will endeavor to find them alternative positions wherever possible."

* Starbucks Corp.'s independent advisers recommended that the coffee chain overhaul its hiring, training and promotion procedures, as well as address racial bias in the long term through efforts that "go beyond staff trainings." In a 28-page report, the advisers from NAACP Legal Defense and Education Fund outlined recommendations for the Seattle-based chain, including a regular audit of its 8,000 stores for racial profiling, updates to policy manuals and increased leadership diversity.

* Starbuck's South Korean unit will turn more than 100 of its outlets into cashless stores beginning July 16 following the constant decline of cash transactions in the country, Yonhap News Agency reported. The company, a joint venture between Starbucks Coffee International Inc. and department store operator Shinsegae Inc., began trialing cashless stores in April.


* China's exports to the U.S., in yuan terms, slowed to a 3.8% annual rise in June, 23.8 percentage points lower than the growth rate seen a year earlier, data from the General Administration of Customs showed. Exports of agricultural products to the U.S. in June slipped 0.9% year over year, while exports of traditional labor-intensive products rose 3.5%, and mechanical and electrical products climbed 4.0%. For the first half of 2018, exports to the U.S. increased 5.4% year over year, down from the 19.3% rise during the same period in 2017.

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The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, Hang Seng fell 1.41% to 28,545.57, while the Nikkei 225 dropped 0.12% to 21,785.54.

In Europe, around midday, the FTSE 100 climbed 0.58% to 7,591.56, and the Euronext 100 gained 0.93% to 1,045.47.

On the macro front

The motor vehicle sales report, the Redbook Index for retail sales, and the factory orders report are due out today.

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