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Groupe Lactalis to eat up Kraft Heinz’s assets
Posted on Wednesday, 16 September 2020 14:41
Groupe Lactalis, through a US affiliate, has agreed to buy Kraft Heinz’s natural, grated, cultured and speciality cheese businesses for USD 3.20 billion.
Based on the purchase price, the deal represents a multiple of 12.0x the vendor’s adjusted earnings before interest, taxes, depreciation and amortisation for the financial year ended 27th June 2020.
Following the sale, Kraft Heinz plans to use the proceeds to pay down debt.
Subject to regulatory reviews and approvals, the transaction is due to close in the first half of 2021.
Under the terms of the deal, Groupe Lactalis will buy the vendor’s Canadian grated cheese business, as well as its international cheese assets outside of North America.
The acquired units include brands such as Breakstone’s, Knudsen, Polly-O and Athenos.
Groupe Lactalis has also agreed to pick up Kraft Heinz’s production facilities in New York and Wisconsin and will add 750 of the group’s employees to its operations.
However, the company will retain several of its brands worldwide, including KraftSingles, Velveeta and Cracker Barrel.
Upon closing, Kraft Heinz plans to focus on businesses where it has stronger brand equity and greater growth prospects.
Combined, the divested cheese assets contributed around USD 1.80 billion to the vendor’s sales during the 12 months ended 27th June 2020.
Established in 1993, Groupe Lactalis claims to be the world’s leading dairy business.
The company has 85,000 employees and operates in 51 countries globally.
Groupe Lactalis is no stranger to the acquisition trail; in July 2019, it snapped up US-based Ehrmann Commonwealth Dairy for an undisclosed sum.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 161 deals targeting dairy product manufacturers announced worldwide in 2020 to date.
Citigroup Global Markets bought a 5.5 per cent stake in France-based Danone for EUR 2.26 billion in the largest of these.
This was followed by Visionox Technology announcing plans to raise CNY 5.00 billion (USD 736.91 million) through a private placement.
© Zephus Ltd