TOP NEWS
* Europeans investment group JAB Investments agreed to acquire Pret A Manger Ltd, a U.K.-based caterer that offers ready-to-eat food from 530 shops worldwide. JAB Investments, which owns Panera Bread Co. in the U.S., will buy Pret A Manger from international private equity firm Bridgepoint. Terms were not disclosed, although the Financial Times, citing people with knowledge of the transaction, reported that the price tag was £1.5 billion including debt. The deal is expected to be completed during the summer of 2018.
* As planned, Starbucks Corp. is closing more than 8,000 company-owned locations during the afternoon of May 29 to address implicit bias, promote conscious inclusion and prevent discrimination with nearly 175,000 of its staff. The coffee chain's racial-bias education program comes after the arrest of two black men at one of Starbucks' Philadelphia cafes, which according to a Reuters report, drew racial profiling accusations at the company.
FOOD RETAIL AND DISTRIBUTION
* The Confederation of All India Traders, or CAIT, filed a petition with the Competition Commission of India to oppose Walmart Inc.'s $16 billion takeover of Flipkart Online Services Pvt. Ltd., Reuters reported. CAIT reportedly said the deal would create unfair competition and result in predatory pricing. However, people with knowledge of the transaction told Reuters that the petition will likely not affect the regulator's approval of the deal.
* Food retailer X5 Retail Group NV opened its 13,000th store, a nearly 350 square meter Pyaterochka outlet, in the Russian city of Vladikavkaz. The company also signed a cooperation agreement with the government of North Ossetia-Alania to open 25 stores in the region by the end of 2019.
BEVERAGES
* Coca-Cola Co. launched a lemon-flavored low-alcohol canned drink in Japan called Lemon-Do, the beverage conglomerate's first alcoholic drink, in a move to capitalize on the country's growing demand for alcopops, the South China Morning Post reported. The fizzy drink, currently in its pilot phase, will be available with 3%, 5% and 7% alcohol in the southern Kyushu region, the report added, citing Masaki Iida, spokesman for Coca-Cola's Japanese arm. The U.S.-based drink producer, which previously announced its intention to enter the low-alcohol market, does not plan to roll out the new product outside of the country, Coca-Cola Japan President Jorge Garduño told the newspaper.
PACKAGED FOODS
* Food giant Nestlé SA may slash up to 500 IT positions in its Switzerland office as it plans to reorganize some of its global IT operations over the next 18 months. The decision was made in a bid to enhance operations and benefit from the company's existing technology hub in Spain and other Nestlé locations. There will be a period of consultation with affected employees with options that include job offers within the company, early retirement and outplacement support.
* Nestlé SA's Japanese subsidiary said it plans to expand its "Wellness Ambassador" nutrition service platform, the Nikkei Asian Review reported. The new subscription-based healthcare platform will offer nutritional advice based on a customer's blood, DNA and dietary habits, the report said, citing Nestle Japan CEO Kozo Takaoka. Aside from health advice, the platform manages sales of specialized green tea-flavored nutritional supplements, with vitamins, magnesium or calcium.
* Del Monte Pacific Ltd. or DMPL, confirmed a report by Malaya Business Insight that its Philippines subsidiary has received approval from the country's securities regulator for its initial public offering, which is priced at up to 17.55 billion pesos. Del Monte Philippines Inc., or DMPI, intends to offer 587.44 million of the secondary shares owned by its parent at a price of up to 29.88 pesos per share, the newspaper reported. DMPI reportedly will use proceeds from the sale to partially prepay or repay certain facilities extended to DMPL and its subsidiaries. The Singapore-based food company is expected to own 79% of Del Monte Philippines after the IPO, the report added.
* Japanese seasonings producer Ajinomoto Co. Inc. is mulling over the sale of its Hong Kong soy sauce brand Amoy Food Ltd., which it bought from Danone in 2006, Bloomberg News reported, citing people familiar with the matter. Ajinomoto, which is assessing potential interest in its condiments manufacturing unit, reportedly could book about $70 million to $80 million if a deal happens.
AGRICULTURAL PRODUCTS
* Protests over high fuel prices in Brazil may halt production in 150 mills and 14,000 sugarcane suppliers in São Paulo as truckers block major highways across the country, Reuters reported, citing sugarcane industry group UNICA. The situation in Brazil could cause a sales loss of 180 million reais, UNICA told Reuters, while trade group Fórum Nacional Sucroenergético said stalled mills in Brazil's center-south could rise from 220 to 340 by May 31 if the protests continue.
* KWS Saat SE renewed the offer it made in January to buy global vegetable seed business Nunhems from Bayer AG, which will allow the German pharmaceutical and life sciences company to proceed with its acquisition of fertilizer producer Monsanto Co. The agricultural seed developer said that its bid included "attractive terms" for Bayer, which agreed to divest its crop science segment to BASF SE, including its vegetable seed division, as part of its purchase of Monsanto.
RESTAURANTS
* Hong Kong-based restaurant operator LH Group Ltd received strong market support during its IPO as it recorded about 44,000 applications for abobut 19.6 billion of its shares, or orders of 979 times the stock available. Excluding reserved shares, the public securities offering, which was priced at a fixed HK$1.10 per share, exceeded the company's issued stocks by nearly 1,087 times, the highest for a food and beverages stock in the Hong Kong bourse.
TOBACCO & SMOKING PRODUCTS
* Indian tobacco company ITC Ltd. is in talks to acquire floor cleaner brand Nimyle from agricultural products manufacturer Arpita Agro Pvt. Ltd. as it plans to enter the household cleaning market, Business Standard reported, citing sources aware of the development. The potential transaction, the size of which is unknown, reportedly is also expected to increase ITC's revenue in the fast-moving consumer goods space.
INDUSTRY NEWS
* The New Zealand government plans to selectively slaughter more than 150,000 cattle as it attempts to rid the country of Mycoplasma bovis disease after an outbreak in 2017 threatened its dairy and beef markets, the Financial Times reported. Although the infection does not put humans or food safety at risk, the government will still try to eradicate the disease, a plan that could cost New Zealand about NZ$1 billion over 10 years, which includes compensation paid to farmers, the report said.
The day ahead
Early morning futures indicators pointed to a lower opening for the U.S. market.
In Asia, Hang Seng lost 1.00% to 30,484.58, while the Nikkei 225 fell 0.55% to 22,358.43.
In Europe, around midday, the FTSE 100 dropped 1.36% to 7,625.13, and the Euronext 100 shed 1.16% to 1,054.14.
On the macro front
The S&P Corelogic Case-Shiller home price index, the consumer confidence report, the State Street Investor Confidence Index and the Dallas Fed manufacturing survey are due out today.
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