The Kraft Heinz Company has announced that it has agreed to sell parts of its natural, grated, cultured and specialty cheese businesses to a US affiliate of Groupe Lactalis for $3.2 billion (€2.7 billion).
The proposed transaction, subject to regulatory review and approval, is expected to close in the first half of 2021, the company added.
'Sustainable Competitive Advantage'
Kraft Heinz CEO Miguel Patricio, commented, “We believe these cheese and dairy businesses will thrive in the hands of a global dairy company like Groupe Lactalis.
“At the same time, the transaction will enable us to build a 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.”
The cheese businesses that are being sold contributed approximately $1.8 billion (€1.52 billion) to Kraft Heinz’s net sales for the twelve months ended 27 June 2020, the company added.
RBC Capital Markets, LLC served as exclusive financial advisor to Kraft Heinz for this transaction, while Paul, Weiss, Rifkind, Wharton & Garrison LLP served as their legal advisors.
Highlights Of The Deal
The deal includes the company’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.
The transaction includes the Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s, and Cracker Barrel brands in the US, and Cheez Whiz outside the US and Canada.
However, the company will retain the Philadelphia Cream Cheese, Kraft Singles, Velveeta Processed Cheese and Cheez Whiz Processed Cheese businesses in the US and Canada.
At a global level, it will retain the Kraft, Velveeta and Cracker Barrel Mac & Cheese businesses as well as the Kraft Sauces division.
Kraft Heinz will also sell production facilities located in Tulare, California; Walton, N.Y.; and Wausau, Wisconsin, and a distribution centre in Weyauwega, Wisconsin.
These facilities and their employees will continue to operate normally and approximately 750 employees will be transferred from Kraft Heinz to Groupe Lactalis, the company added.