Comprehensive M&A data with integrated detailed company information
Kraft Heinz to sell its natural cheese business to Parmalat
Posted on Wednesday, 07 November 2018 15:26
Kraft Heinz has agreed to spin off its Canada-based natural cheese business to food distribution company Parmalat for CAD 1.62 billion (USD 1.23 billion).
Its cheese division accounted for roughly CAD 560.00 million of the vendor’s net sales last year, and the brands Cracker Barrel, P’tit Quebec and aMOOza are included within the divestiture.
Proceeds from the acquisition will be used to pay down Kraft Heinz’s debt, which according to Reuters, has been caused by the surging costs of raw materials and transport.
Subject to regulatory reviews and approvals, the transaction is expected to complete in the first half of 2019.
Under the terms of the purchase, Parmalat will also acquire Kraft Heinz’s Ontario-based production facility and take on its 400 employees.
The sale is part of the vendor’s strategy to sell off assets and focus on larger brands that have greater opportunity for growth.
As a result, Kraft Heinz will prioritise its other cheese products, including Philadelphia, Cheez Whiz, and Kraft Singles.
News of a sale follows last month’s United States-Mexico-Canada Agreement, which has opened the door for US companies to enter Canada’s previously protected domestic market.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 26 deals targeting cheese manufacturers announced worldwide since the beginning of 2018.
In the largest of these, unknown institutional investors agreed to buy Australian Bega Cheese for AUD 2.00 million (USD 1.44 million).
Other companies targeted in this sector include Arab Dairy Products Company, Berezovskii Syrodelnyi Kombinat, Ladismith Cheese Company and Lyrical Foods.
Italy-based Parmalat claims to be a global player in food production and distribution, generating revenue of EUR 6.69 billion in the financial year ending 31st December 2017, up from EUR 6.48 billion in the corresponding period of 2016.
It has a worldwide presence across 24 countries, and its output includes dairy products and fruit beverage brands such Santal, Fibressse, Black Diamond and Melrose.
© Zephus Ltd