NEW YORK -- Food and tobacco giant Philip Morris said Wednesday it plans to combine its European food units, Kraft General Foods Europe and Jacobs Suchard AG, into a single company.
The new company, to be named Kraft Jacobs Suchard, will be based in Zurich, Switzerland, employ 32,000 people in 20 European countries and have annual sales of around $9 billion.
'It simply no longer makes sense to have two European food companies. We can become more effective and efficient with a single organization managing our overall business and realigning the benefits of larger scale in purchasing, logistics,' said Jack Keenan, president and CEO of Kraft General Foods International, the parent of the new company.
The company said the move also reflects the increasingly important role of Philip Morris' food businesses within the European food industry.
Philip Morris has built a position in the European food industry over the last several years. It started with the acquisitions of General Foods Corporation in 1985 and Kraft Inc. in 1988, which included such well-known European brands as Cafe HAG, Gevalia and Maxwell House coffees, Hollywood gum and Kraft, Philadelphia and Invernizzi cheeses. With the acquisition of Jacobs Suchard (1990) and Freia Marabou (1993), confectionery was added as a new category.
Today, the company is well represented in Western Europe and has entered Eastern and Central Europe through several acquisitions.
Kraft Jacobs Suchard not only represents the three best known trademarks, but also the three names of entrepreneurs who laid the foundation for successful businesses in the last century: James L. Kraft, Johann Jacobs and Philippe Suchard, the company said.
In order to guarantee a smooth transition and lessen any disruptions of normal business, the consolidations of business units will take place over the next few months.
This will include combining the Belgian, Dutch, and German businesses.
Raymond G. Viault, president and chief executive officer of Kraft Jacobs Suchard, said, 'Kraft Jacobs Suchard is being created to meet the challenges of the years ahead of us, and it will enable us to achieve the mission to become the most successful food company in Europe.'