Via Financial Times

Mars has sued rival JAB Holdings over claims a former executive stole thousands of secret company documents and passed them to the owner of Pret A Manger and Panera Bread, sparking a rare public battle between the privately held food multinationals.

The US confectionery maker alleges former Mars executive Jacek Szarzynski violated trade secrets by downloading more than 6,000 internal documents and then shared them with new colleagues at JAB and its Pret Panera unit.

The files included detailed financial results, strategic planning documents and potential acquisition targets, claimed Mars, according to the lawsuit filed in a court in Washington DC on Wednesday.

“Szarzynski’s downloading was massive and included a broad range of confidential and proprietary Mars documents about multiple global business sectors,” said the confectionery group, which makes snacks such as M&M’s sweets and Twix bars along with Pedigree and Sheba dog foods. 

“The forensic evidence shows that Szarzynski carefully targeted the Mars documents he unlawfully download[ed].”

JAB denies the claims. It said in a statement: “The lawsuit is completely without legal merit. JAB has already extensively investigated the allegations through its outside counsel, Debevoise & Plimpton, and concluded that neither JAB nor Pret Panera has used or benefited in any way from any Mars information.” Mr Szarzynski, via JAB, declined to comment.

“We tried to resolve this amicably, but unfortunately we were unable to do so,” said Stefanie Straub, general counsel at Mars.

Mr Szarzynski, a Mars employee for more than two decades, rose to the role of global chief financial officer of Mars Petcare before leaving for JAB, where he was named a partner in February 2019. He also serves as chief operating officer and chief financial officer at Pret Panera.

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Mars is asking the court to ban JAB from using the documents and force the Luxembourg-based group to delete them from its systems, in addition to damages. It also accuses Mr Szarzynski of expenses fraud, claiming he charged Mars for expenses relating to JAB.

It said at least 6,166 documents, including files relating to petcare, food and the overall Mars business, were taken in late 2018 as Mr Szarzynski held talks with executives at his future employer. According to Mars, JAB later admitted receiving the documents but said Mr Szarzynski had taken them as they included his personal information.

Mr Szarzynski is one of several former senior executives from Mars now working at JAB, which was set up to handle the wealth of Germany’s billionaire Reimann family. 

Olivier Goudet, managing partner, joined in 2012 from Mars where he was chief financial officer and was heavily involved in some of the US food group’s biggest deals, including its $23bn acquisition of Wrigley, the chewing-gum maker. 

At JAB, Mr Goudet has embarked on a $50bn dealmaking spree that has transformed the group’s holdings through a series of acquisitions in coffee and soft drinks as well as with the purchase of several food-to-go chains.

Bart Becht, right, quit JAB after falling out with Olivier Goudet, centre, and Peter Harf over strategy

In January 2019, JAB announced a leadership overhaul after the departure of chairman Bart Becht who quit after falling out with Mr Goudet and Peter Harf, who created JAB and is the longtime confidante of the Reimann family, over strategy. 

As part of the shake-up, JAB announced the appointment of new partners including Mr Szarzynski and Fabien Simon, another former Mars executive.

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In February 2019, JAB made its first acquisition in petcare with a deal for Compassion-First Pet Hospitals, which operates 41 veterinary hospitals and emergency clinics in the US, putting it into a consumer category where Mars has a sizeable presence. 

Three months later, JAB agreed to buy a majority stake in National Veterinary Associates, which owned about 670 veterinary hospitals and 70 “pet resorts” across the US, Canada, Australia and New Zealand.