Cloetta Fazer acquires Swedish confectionery company Karamellpojkarna

Cloetta Fazer acquires Swedish confectionery company Karamellpojkarna

Cloetta Fazer has acquired confectionery producer Karamellpojkarna AB, the third
largest supplier of throat pastilles in Sweden. The company's Extra Starka
Original brand is Sweden's top-selling product in the segment. Karamellpojkarna
is also the leader in the lollipop segment with its Fruktklubbor brand. Through
the acquisition, Cloetta Fazer will increase its sales in Sweden by around 6%.

Throat pastilles are the third largest confectionery segment, accounting for 14%
of the total market in Sweden, and have grown dramatically in Cloetta Fazer's
main markets. Among other things, the acquisition will give Cloetta Fazer
expertise in tooth-friendly products and a strong position in a fast-expanding
product segment in the Swedish market. 

“In line with our strategy, we are seeking growth by diversifying into product
areas where we currently have a weak position or none at all. Karamellpojkarna's
portfolio includes a number of robust brands and I am convinced that we can
further develop and strengthen these,” says Cloetta Fazer's CEO Jesper Åberg.

Karamellpojkarna a major player in the pastille segment 
Karamellpojkarna, founded in 1952, is a family-owned company that manufactures,
markets and sells well known brands like Extra Starka, Fünf Kräuter, Hemkola and
Kungen av Danmark. Karamellpojkarna has some 40 employees and reported annual
sales of around SEK 70 million in 2006. 

In Sweden, Karamellpojkarna is a major player in the throat pastille segment.
Aside from pastilles the company also makes fruit-flavoured lollipops and toffee
products. Extra Starka is currently Sweden's top-selling pastille in terms of
volume and the company also has a leading position in the Swedish lollipop
segment with its classic Fruktklubbor and Fifty-Fifty products. In addition,
Karamellpojkarna has extended the assortment by launching a range of
tooth-friendly sugar free pastilles containing xylitol in 2007.

“The knowledge of sugar free products that Karamellpojkarna brings to Cloetta
Fazer is a welcome addition and we expect this to open up new opportunities for
us in the market,” says Jesper Åberg.

All Karamellpojkarna products are manufactured at the company's factory in
Alingsås, north of Gothenburg on the west coast of Sweden, and production is
planned to remain there. Cloetta Fazer's growth target in the pastille segment
also calls for increased production volumes.

“Cloetta Fazer is an ideal partner for us many respects and we are highly
optimistic about the deal, which will give our brands new momentum for continued
growth and development in this segment. I am also pleased with the plans to keep
production operations here in Alingsås,” says Niklas Bohlin, Managing Director
of Karamellpojkarna.

The transfer of ownership will take place on 1 October 2007. The parties have
agreed not to disclose the purchase price. 	

Supports Cloetta Fazer's development plans
Cloetta Fazer has successfully driven development in the Swedish and Finnish
confectionery markets and strengthened its position in the Baltic countries.
Today Cloetta Fazer has a confectionery market share of 40% in Finland and 24%
in Sweden. In the Baltic region, the company is number two in the market.

The acquisition supports Cloetta Fazer's plans for development in its main
markets. Over a three-year period Cloetta Fazer has set its overall growth
target at 25%, of which 10% will be met organically and 15% through
acquisitions.

“The transaction will boost our total sales by approximately 2%. In view of the
steadily rising demand for products of this type, we firmly believe there is
scope to further accelerate our growth in the throat pastille segment,” says
Jesper Åberg.

For additional information contact Jesper Åberg, Managing Director and CEO,
mobile +46 70-180 2101 or Curt Petri, CFO, mobile +46 70-593 2169. 
www.cloettafazer.com

About Cloetta Fazer 
The Cloetta Fazer Group is the Nordic region's leading confectionery company,
with a market share of around 22 per cent. The company has production facilities
in Sweden and Finland. Cloetta Fazer's strength lies in its many popular brands,
such as Karl Fazer, Kexchoklad, Dumle, Geisha, Polly and Center. The average
number of employees is around 1,500 and annual sales amounts to approximately
SEK 3 billion.