The Kraft Heinz Company announced today that it has entered into
a definitive agreement to sell its Canadian natural cheese business
to Parmalat for a purchase price of $1.62 billion CAD
(approximately $1.23 billion USD at current FX rates). The
agreement includes the sale of natural cheese brands Cracker
Barrel, P’tit Quebec and aMOOza! in the Canadian market. The
proposed transaction is expected to close in the first half of
2019, subject to regulatory review and approval.
“We’re excited about what this transaction means for our future
growth and business in Canada,” said Bernardo Hees, Chief Executive
Officer of Kraft Heinz. “We also believe Parmalat is uniquely
positioned to advance the natural cheese business given their
experience and focus on the dairy industry. At the same time, we
can focus on the segments and categories where we have stronger
brand equity, competitive advantage and greater growth
prospects.”
Under the terms of the agreement, Kraft Heinz will sell its
production facility located in Ingleside, Ontario. Kraft Heinz
Canada will also transfer approximately 400 employees from that
facility to Parmalat.
Kraft Heinz will continue to own and market its other cheese
products, including Philadelphia, Cheez Whiz and Kraft Singles,
which are processed in Mount Royal, Quebec, where Kraft Heinz
Canada employs approximately 900 employees. The Kraft Heinz Company
remains steadfast in its commitment to the Canadian market,
illustrated by its recent acquisition of the Vancouver-based
Ethical Bean coffee brand. Across Canada, Kraft Heinz currently
employs approximately 2,000 employees in its facilities and
thousands more, indirectly, through its co-manufacturers.
The natural cheese business being sold contributed approximately
$560 million CAD (approximately $427 million USD at current FX
rates) to Kraft Heinz’s net sales in 2017. Kraft Heinz expects to
use transaction proceeds primarily to pay down debt, with reduced
interest expenses expected to offset the majority of EPS dilution
on a run-rate basis.
RBC Capital Markets served as exclusive financial advisor to
Kraft Heinz Canada for this transaction, while Fasken Martineau
DuMoulin LLP served as legal advisors.
About Kraft Heinz
The Kraft Heinz Company (NASDAQ: KHC) is the fifth-largest food
and beverage company in the world. A globally trusted producer of
delicious foods, The Kraft Heinz Company provides high quality,
great taste and nutrition for all eating occasions whether at home,
in restaurants, or on the go. The Company’s iconic brands include
Kraft, Heinz, ABC, Capri Sun,
Classico, Jell-O, Kool-Aid, Lunchables, Maxwell
House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon,
Quero, Smart Ones and Velveeta. The Kraft Heinz Company is
dedicated to the sustainable health of our people, our planet and
our Company. For more information, visit
www.kraftheinzcompany.com.
About Parmalat
The Parmalat Group is a global player in the production and
distribution of foods that are essential for everyday wellness:
milk, dairy products and fruit beverages, which generated revenues
of more than 6.6 billion euros in 2017. More than 26,000 people
work at Parmalat’s facilities in Europe, the Americas, Africa and
Oceania. Parmalat S.p.A., the Group's Parent Company, has been
listed on the Italian Stock Exchange since October 6, 2005.
With more than 130 years of brand heritage in the Canadian dairy
industry, Parmalat Canada is committed to producing great tasting,
nutritious dairy products and supporting the health and wellness of
Canadians through its iconic brands like Beatrice, Lactantia,
Astro, Black Diamond and Balderson.
Parmalat Canada directly employs 3,000 Canadians, supports
hundreds of farming families and contributes to livelihoods of
thousands of Canadians who provide key services to our 16
manufacturing sites and national supply chain.
Forward-Looking
Statements
This press release contains a number of forward-looking
statements. Words such as “expect,” “invest,” “grow,” “continue,”
"commit," “expand,” “advance,” “focus,” “will,” and variations of
such words and similar future or conditional expressions are
intended to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to,
statements regarding Kraft Heinz’s plans, expected timing and
benefits of the transaction, investment and growth plans in the
region, and impact of the sale. These forward-looking statements
are not guarantees of future performance and are subject to a
number of risks and uncertainties, many of which are difficult to
predict and beyond Kraft Heinz’s control.
Important factors that may affect Kraft Heinz’s business and
operations and that may cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, operating in a highly competitive industry; changes in
the retail landscape or the loss of key retail customers; Kraft
Heinz’s ability to maintain, extend and expand its reputation and
brand image; the impacts of Kraft Heinz’s international operations;
Kraft Heinz’s ability to leverage its brand value to compete
against retailer brands and other economy brands; Kraft Heinz’s
ability to predict, identify and interpret changes in consumer
preferences and demand; Kraft Heinz’s ability to drive revenue
growth in its key product categories, increase its market share or
add products; an impairment of the carrying value of goodwill or
other indefinite-lived intangible assets; volatility in commodity,
energy and other input costs; changes in the Kraft Heinz’s
management team or other key personnel; Kraft Heinz’s ability to
realize the anticipated benefits from its cost savings initiatives;
changes in relationships with significant customers and suppliers;
the execution of Kraft Heinz’s international expansion strategy;
tax law changes or interpretations; legal claims or other
regulatory enforcement actions; product recalls or product
liability claims; unanticipated business disruptions; Kraft Heinz’s
ability to complete or realize the benefits from potential and
completed acquisitions, alliances, divestitures or joint ventures;
economic and political conditions in the United States and in
various other nations in which we operate; volatility of capital
markets and other macroeconomic factors; increased pension, labor
and people-related expenses; volatility in the market value of all
or a portion of the derivatives we use; exchange rate fluctuations;
risks associated with information technology and systems, including
service interruptions, misappropriation of data or breaches of
security; Kraft Heinz’s ability to protect intellectual property
rights; impacts of natural events in the locations in which we or
our customers, suppliers or regulators operate; Kraft Heinz’s
indebtedness and ability to pay such indebtedness; Kraft Heinz’s
ownership structure; the impact of future sales of Kraft Heinz’s
common stock in the public markets; Kraft Heinz’s ability to
continue to pay a regular dividend; restatements of Kraft Heinz’s
consolidated financial statements; review of the transaction by the
Canadian Competition Bureau, or other agencies; and other factors.
For additional information on these and other factors that could
affect Kraft Heinz’s forward-looking statements, see Kraft Heinz’s
risk factors, as they may be amended from time to time, set forth
in its filings with the Securities and Exchange Commission. Kraft
Heinz disclaims and does not undertake any obligation to update or
revise any forward-looking statement in this press release, except
as required by applicable law or regulation.
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version on businesswire.com: https://www.businesswire.com/news/home/20181106005967/en/
Kraft Heinz CompanyMichael MullenSenior Vice President of
Corporate AffairsMichael.Mullen@kraftheinz.comorKraft Heinz
CanadaAv MaharajVP Corporate and Legal
Affairsav.maharaj@kraftheinz.com
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