Kraft To Sell Canadian Natural Cheese Operations To Parmalat

Marco Green
November 9, 2018

Kraft Heinz Co has agreed to sell its Canadian natural cheese business to the dairy food company, Parmalat SpA, which in turn is a subsidiary of the Belgian food giant Lactalis.

In the agreement, Parmalat will pick up assets that contributed approximately $560 million to Kraft Heinz's net sales a year ago, including household cheese brand Cracker Barrel.

The deal should close in the second half of 2019.

Kraft Heinz Canada will also transfer approximately 400 employees from that facility to Parmalat. "At the same time, we can focus on the segments and categories where we have stronger brand equity, competitive advantage and greater growth prospects".

The Kraft Heinz Company has opened a digital hub designed to create digitally powered business models and to help launch entrepreneurial ideas within the business.

In another press release, Kraft, Heinz stressed that he would remain owner of other brands such as Philadelphia, Cheez Whiz and Kraft Singles, produced in Quebec. "This is part of a larger growth approach for Kraft Heinz and is in addition to our recently announced $100 million venture fund, Evolv Ventures".

The company also said it remains "steadfast in its commitment to the Canadian market", using its recent acquisition of a Vancouver-based coffee brand as an example. The company expects to use transaction proceeds primarily to pay down debt.

RBC Capital Markets served as exclusive financial adviser to Kraft Heinz Canada, while Fasken Martineau DuMoulin LLP served as legal advisers. The business generated about $560 million in net sales in 2017.

In Canada, Parmalat has 3,000 employees, 16 dairy processing plants and a dedicated research and development facility.

The company says the acquisition would help grow its business and include further investment.

Other reports by Click Lancashire

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