Latest News
Kraft Heinz Canada to Sell Its Natural Cheese Business to Parmalat
Wednesday 07 November 2018

7 November 2018 - US-based food and beverage company The Kraft Heinz Company has entered into a definitive agreement to sell its Canadian natural cheese business to Italy-based Parmalat for a purchase price of CDN 1.62bn (approximately USD 1.23bn), the company said.

This agreement includes the sale of natural cheese brands Cracker Barrel, P'tit Quebec and aMOOza! in the Canadian market. 

The proposed transaction is expected to close in the first half of 2019, subject to regulatory review and approval.

Under the terms of the agreement, Kraft Heinz will sell its production facility located in Ingleside, Ontario. Kraft Heinz Canada will also transfer approximately 400 employees from that facility to Parmalat.

Kraft Heinz will continue to own and market its other cheese products, including Philadelphia, Cheez Whiz and Kraft Singles, which are processed in Mount Royal, Quebec, where Kraft Heinz Canada employs approximately 900 employees.

The Kraft Heinz company remains steadfast in its commitment to the Canadian market, illustrated by its recent acquisition of the Vancouver-based Ethical Bean coffee brand.

Across Canada, Kraft Heinz currently employs approximately 2,000 employees in its facilities and thousands more, indirectly, through its co-manufacturers.

The natural cheese business being sold contributed approximately CDN 560m (approximately USD 427m) to Kraft Heinz's net sales in 2017.

Kraft Heinz expects to use transaction proceeds primarily to pay down debt, with reduced interest expenses expected to offset the majority of EPS dilution on a run-rate basis.

The Kraft Heinz Company (NASDAQ: KHC) is the fifth-largest food and beverage company in the world.

The company's brands include Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Smart Ones and Velveeta.

The Parmalat Group is a global player in the production and distribution of foods that are essential for everyday wellness: milk, dairy products and fruit beverages, which generated revenues of more than EUR 6.6bn in 2017.

RBC Capital Markets served as exclusive financial advisor to Kraft Heinz Canada for this transaction, while Fasken Martineau DuMoulin LLP served as legal advisors.
Details
Date Published: 07/11/2018
Target: Kraft Heinz/Canadian natural cheese business
Country: Canada
Deal Size: 1.23bn (USD)
Sector: Food/Beverages/Tobacco
Type: Divestment
Financing: Cash and Stock
Status: Agreed
Vendor: The,  Kraft Heinz Company
Buyer: Parmalat
Comment:


Options