Kraft Heinz to sell Planters, Corn Nuts brands to Hormel for $3.35 billion

By Richa Naidu NEW YORK (Reuters) - Kraft Heinz Co said on Thursday that it plans to sell its nuts business - including most Planters and Corn Nuts products - to Hormel Foods Corp for $3.35 billion, sending shares up 6%. The Chicago-based company has been trying to streamline its portfolio and focus on more accretive brands, having faced criticism for years about losing out to private label products because it is in too many categories to focus on key brands. In September, Kraft Heinz said it would sell its natural cheese business to French dairy company Groupe Lactalis for $3.2 billion.

Reuters February 12, 2021 00:07:28 IST
Kraft Heinz to sell Planters, Corn Nuts brands to Hormel for $3.35 billion

Kraft Heinz to sell Planters Corn Nuts brands to Hormel for 335 billion

By Richa Naidu

NEW YORK (Reuters) - Kraft Heinz Co said on Thursday that it plans to sell its nuts business - including most Planters and Corn Nuts products - to Hormel Foods Corp for $3.35 billion, sending shares up 6%.

The Chicago-based company has been trying to streamline its portfolio and focus on more accretive brands, having faced criticism for years about losing out to private label products because it is in too many categories to focus on key brands. In September, Kraft Heinz said it would sell its natural cheese business to French dairy company Groupe Lactalis for $3.2 billion.

"Planters is one of the brands most affected by private label in our portfolio. It's also, of course, affected as a commodity," Chief Executive Miguel Patricio said in a statement.

"We must focus on areas where we see the greatest competitive advantage."

Patricio said in an interview with Reuters the Planters deal gives Kraft Heinz the flexibility to invest internally, make acquisitions or pay down debt. He declined to comment on what brands Kraft Heinz is interested in buying but said the company is "not in any negotiation at the moment."

Kraft Heinz's nuts business contributed about $1.1 billion to net sales in 2020.

The deal, which is expected to close in the first half of 2021, includes global intellectual property rights to the brands, subject to existing third-party licenses.

Kraft Heinz also beat analysts' estimates on Thursday for fourth-quarter revenue as people under pandemic lockdown during the holidays bought more packaged food products like Mac and Cheese, Heinz ketchup and Oscar Meyer meat slices.

"No large-cap food company has benefited more from the COVID era than Kraft Heinz, with strong non-promoted sales growth and much needed balance sheet relief," Evercore ISI analyst David Palmer wrote in a recent note.

Sales grew 6.2% to $6.94 billion in the three months ended Dec. 26, beating the average estimate of $6.82 billion, according to Refinitiv data.

Adjusted net earnings rose to 80 cents per share from 72 cents per share a year earlier, beating estimates of 74 cents per share.

(Reporting by Richa Naidu in New York; editing by Jason Neely and Steve Orlofsky)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Thyssenkrupp ends talks with UK's Liberty on steel unit sale
Business

Thyssenkrupp ends talks with UK's Liberty on steel unit sale

By Christoph Steitz, Tom Käckenhoff and Arno Schuetze FRANKFURT (Reuters) - German conglomerate Thyssenkrupp ended talks to sell its steel division to Britain's Liberty Steel due to differences over value, the latest setback in efforts to consolidate the European sector. Liberty Steel, led by commodities tycoon Sanjeev Gupta, last month submitted a firmed-up non-binding bid for Thyssenkrupp's steel unit, Europe's second biggest in terms of sales, which sources said included commitments to protect jobs and sites.

Factbox: Stonks in Washington: Deciphering Reddit's WallStreetBets lingo
Business

Factbox: Stonks in Washington: Deciphering Reddit's WallStreetBets lingo

(Reuters) - Reddit trading lingo may filter in to Washington on Thursday when top hedge fund managers, the head of Robinhood and Roaring Kitty himself are set to give testimony before U.S. House of Representatives lawmakers.

Brent gives up gains after rising above $65 on Texas freeze
Business

Brent gives up gains after rising above $65 on Texas freeze

By Stephanie Kelly NEW YORK (Reuters) - Oil prices steadied on Thursday, with Brent edging back from a 13-month high, after a sharp drop in U.S. crude inventories supported prices, while buying spurred by a cold snap in the largest U.S. energy-producing state petered out.