Heinz buys Danone's British and U.S. business |
|
|
|
Published
:
Mon, 20 Jun 2005 15:35
|
PARIS: U.S. food major H.J. Heinz is buying French company Groupe Danone's British and U.S. sauce divisions, HP Foods and Lea & Perrins, for $855 million. Pittsburgh-headquarted Heinz said the acquisition will help it to focus on its four core areas -- condiments, meals and snacks, infant nutrition and food services.
Danone would be left with its Actimel dairy drinks, Volvic and Evian bottled waters and LU cookies, meaning the company's focus will now be on its core products -- yogurt, bottled water and biscuits.
The deal is expected to be concluded in the next few weeks, according to Heinz.
The purchase price is estimated to be 2.5 to 3 times the sales figure of the HP business, that is, $291.3 million.
Danone's Chief Financial Officer Emmanuel Faber said the price amounted to 11 times the unit's earnings before interest, depreciation and amortization. The company intends to make use of the cash received from the deal as well as from an earlier deal of selling a stake in Spanish brewing company Mahou for share buybacks.
| Heinz will take charge of three Danone plants, two in England and one in the U.S. It will also absorb some 450 staff. The deal gives it a perpetual license to market the Amoy Asian sauces and products in Europe.
Heinz chief executive William Johnson said in a statement issued announcing the deal, "The acquisition of these brands is consistent with our strategy to drive growth in our profitable and expanding core condiments and sauces category."
Heinz had successfully outbid potential buyers like Associated British Foods and Premier Foods and also New York-based sauces and spices group McCormick & Co Inc. in bagging the deal.
The company had recently formed an executive group to coordinate global strategy and it plans to foray into China, India, Indonesia and Russia.
"We are going to place our focus and resources on our big brands with No. 1 and No. 2 market positions and in four large developing markets," said Johnson.
|
|
|
|
|
|
Print this Story
