Hormel Foods to purchase Kraft Heinz’s nut division
For $3.35 billion in cash, Hormel Foods is purchasing Kraft Heinz’s nut division, which includes the Planters brand. It is anticipated that the planned merger will close in the first half of 2021, pending regulatory approval.
The majority of goods marketed under the Planters name, such as trail mix, mixed nuts, Nut-trition goods, Cheez Balls, Cheez Curls, and Corn Nuts brands, are included in the deal. Global intellectual property rights to the Planters brand are also included in the transaction.
The deal will also include manufacturing sites in Suffolk, Virginia; Fort Smith, Arkansas; and Fresno, California.James P. Snee, chairperson, president, and chief executive officer of Hormel Foods, stated, “Planters is an iconic leading snack brand with universal consumer awareness.” “The purchase of the Planters company broadens our position in the expanding snacking market and adds another $1 billion brand to our portfolio.
“The Planters brand nicely compliments our snacking brands, including Hormel Gatherings, Columbus, Justin’s, Skippy, Herdez, and Wholly, and extends our portfolio designed for both social and individual snacking occasions. Additionally, this transaction significantly expands our pool of potential future snacking industry acquisition targets.
In calendar 2020, Planters Nut Snacks generated sales of almost $1.1 billion. The Grocery Products business unit of Hormel is anticipated to experience accretive operating margins in 2022. By 2024, the corporation hopes to achieve synergies of between $50 and $60 million.
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The CEO of Kraft Heinz, Miguel Patricio, stated, “This is another historic step in our rapid transformation of Kraft Heinz.” We will be able to concentrate more on areas where our strong brands have a competitive edge and better growth potential. This implies that we will be pushing real fuel for kids through Lunchables and actual meal alternatives like P3 more aggressively within our Real Food Snacking platform.
Kraft Heinz restructured its brands into six consumer platforms in September. The Planters company was a part of theReal Food Snacking platform, which the company said had sales of $2.2 billion. The sale of Planters will reduce the size of that platform by approximately 50%.Portfolio reshaping also has been a priority for Kraft Heinz. In 2020, the company sold some of its cheese businesses to Lactalis Group for $3.2 billion.