Unigate makes foray in France

Unigate, the food and distribution group, is acquiring two French businesses for a total of Fr540m (£65m) as part of its strategy to expand operations in Europe.

It has bought Prodipal, which produces yoghurts and desserts, and announced its intention to acquire Vedial, a maker of low-fat spreads.

There will also be further performance-related payments of up to Fr30m.

Unigate said yesterday that the acquisitions would create a French-based dairy products business with sales exceeding £100m.

Ross Buckland, Unigate's chairman and chief executive, said: "The purchase of these two businesses marks Unigate's entry into European fresh-food markets beyond the UK."

The French businesses made pre-tax profits of Fr53m in 1993.

Mr Buckland said Vedial's products, St Hubert 41 and Le Fleurier, had many similarities with Unigate's St Ivel Gold in respect of strong, branded positioning, while Prodipal's range was complementary to St Ivel's yoghurts and desserts.

Prodipal will be operating from two factories - in Paris and Normandy and employing 200 people - when its current rationalisation programme is completed.

Vedial, which is being bought from its present joint owners, Lesieur Alimentaire and Sodiaal Industrie, employs 160 people at its factory in north-east France.

Under French labour laws the acquisition of Vedial depends on clearance from the French competition authorities and consultation with relevant trade unions.

Mr Buckland said the expansion should enable the development of new markets and of exports from Britain and the Continent.