Kraft Heinz has entered into an agreement to sell its nuts business to Hormel Foods, including products under its Planters brand, for $3.35 billion.
As part of the deal, Hormel will acquire most products under the Planters brand including single variety and mixed nuts, trail mix, Nut-rition products, Cheez Balls and Cheez Curls; as well as the Corn Nuts brand.
According to Kraft Heinz, the business being sold contributed approximately $1.1 billion to its 2020 full-year net sales, primarily in the US segment.
The deal comes after Kraft agreed to offload part of its cheese business to Lactalis for $3.2 billion last year, as the owner of Heinz Ketchup is seeking to improve its balance sheet and boost growth.
Under the terms of the agreement, Hormel Foods will take ownership of the Corn Nuts facility in California, as well as two Planters production facilities in Arkansas and Virginia. The facilities and employees will continue to operate as normal.
For Kraft Heinz, the divestiture marks a momentous step in the rapid transformation of the company as it looks to improve its growth trajectory.
Miguel Patricio, Kraft Heinz CEO, said: “It will enable us to sharpen our focus on areas with greater growth prospects and competitive advantage for our powerhouse brands. Within our Real Food Snacking platform, this means more aggressively driving real fuel for kids through Lunchables and real meal alternatives like P3.”
Upon completion of the transaction, the Planters brand will join Hormel’s snacking portfolio that includes brands such as Hormel Gatherings, Columbus, Justin’s, Skippy, Herdez and Wholly.
Jim Snee, chairman, president and CEO of Hormel Foods, said: “Planters is an iconic leading snack brand with universal consumer awareness. The acquisition of the Planters business adds another $1 billion brand to our portfolio and significantly expands our presence in the growing snacking space.”
The transaction for the peanut and snacks business is expected to close in the first half of 2021, subject to regulatory review and approval.
© FoodBev Media Ltd 2021
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