FDBusiness.com

Groupe Lactalis to Acquire North American Cheese Business For $3.2 Billion

 Breaking News

Groupe Lactalis to Acquire North American Cheese Business For $3.2 Billion

Groupe Lactalis to Acquire North American Cheese Business For $3.2 Billion
September 22
08:51 2020
Spread the love

The Kraft Heinz Company has agreed to sell its Natural, Grated, Cultured and Specialty cheese businesses to a US affiliate of Groupe Lactalis, the world’s leading dairy group, for a purchase price of US$3.2 billion. The proposed deal is expected to close in the first half of 2021, subject to regulatory review and approval.

The transaction includes Kraft Heinz’s Natural, Grated, Cultured and Specialty cheese businesses in the US, Grated cheese business in Canada, and the entire International Cheese business outside these two countries, including the following brands: Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s, Cracker Barrel in the US only, and outside the US and Canada only, Cheez Whiz.

In addition, Kraft Heinz will partner with Groupe Lactalis on a perpetual license for Kraft in Natural, Grated and International cheeses and Velveeta in Shredded and International cheeses. Kraft Heinz will retain the Philadelphia Cream Cheese, Kraft Singles, Velveeta Processed Cheese and Cheez Whiz Processed Cheese businesses in the US and Canada, the Kraft, Velveeta and Cracker Barrel Mac & Cheese businesses worldwide, and the Kraft Sauces business worldwide.

“We believe these cheese and dairy businesses will thrive in the hands of a global dairy company like Groupe Lactalis,” says Kraft Heinz CEO Miguel Patricio. “At the same time, the transaction will enable us to build sustainable competitive advantage in businesses where we have stronger brand equity, greater growth prospects and can use our manufacturing scale and consumer-based platforms approach. This is a great example of agile portfolio management at work.”

As outlined in the new Kraft Heinz operating model, platform roles will help guide resource allocation and investment decisions. Kraft Heinz will focus on growth areas and take strategic action where appropriate. This will help to accrete the Company’s growth profile, enhance strategic focus, and create shareholder value.

Under the terms of the agreement, Kraft Heinz will sell production facilities located in Tulare, Calif.; Walton, N.Y.; and Wausau, Wis., and a distribution center in Weyauwega, Wis. These facilities and their employees will continue to operate in ordinary course. Approximately 750 employees will be transferred from Kraft Heinz to Groupe Lactalis.

The cheese businesses being sold contributed approximately US$1.8 billion to Kraft Heinz’s net sales for the twelve months ended June 27, 2020. The transaction valuation represents an approximate 12x multiple of LTM Adjusted EBITDA(1) for the standalone business. Kraft Heinz expects to use post-tax transaction proceeds primarily to pay down debt.

(1) LTM Adjusted EBITDA includes allocated expenses for the standalone business for the twelve months ended June 27, 2020.


Warning: count(): Parameter must be an array or an object that implements Countable in /home/fdbusiness/public_html/wp-content/themes/legatus-theme/includes/single/post-tags.php on line 5

About Author

mike

mike

Related Articles

Food & Drink Business Conference & Exhibition 2016

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements