Innocent Drinks Sells (Out?) Some More to Coca Cola
Image from the Evening Standard
A year ago, Innocent drinks, the little British smoothie business that grew and grew, sold 18% of their company to Coca Cola for £30M. Started up by three young students a decade before, they were adamant that their principles would not change with the sale.
While some were sceptical about the sale of an ethical healthy smoothie business to Coke, the owners said that they needed the capital to expand the business. To the horror of many, they have just sold 40% more, so that Coke now owns a majority 58% stake in the business.
Image from the Times
One of the owners defended the sale: "I genuinely believe that this is not a selling out but a continuation of our work. There will be no change in the commitment to natural healthy food, to sustainability and to giving 10% of our profits to charity." One of the original investors has dumped his shares but the remaining founders will supposedly retain operational control of the business so long as they are shareholders. They say that they did it so they could expand the business in Europe (sounds familiar).
Ironically, the sale takes place just days after the Prime Minister visited Innocent's headquarters and hailed it as a great grass-roots British business success story.
Image from BBC
In an update on another sale of an ethical company, Cadbury was recently bought up by Kraft. Despite promises that factories would not be closed, and jobs not lost, the factory in Bristol will be closing down with the loss of 400 jobs. A further 150 staff will be let go at the original Bournville plant in Birmingham. To add insult to injury, the head of Kraft who negotiated the deal got a 41 per cent pay increase right after the sale, bringing her salary to an eye watering £17million last year.
In response to the uproar after the sale, the government wants to introduce a so-called Cadbury's Law, which would give the Government the power to block hostile takeovers of British companies on national interest grounds.