Kraft Heinz Co.
KHC -0.27%
is closing a deal to sell its Planters snack business to Skippy peanut butter owner, Hormel Foods Corp.
HRL 3.90%
, according to people familiar with the matter.
A deal, valuing the century-old mark at about $ 3 billion, could be announced as early as next week, as long as the negotiations do not fall apart, people said.
Planadores mainly sells nuts and mixtures for snacks, with labels featuring the mascot Mr. Peanut wearing a top hat and monocled.
In addition to its chili and cold cuts, Hormel, of Austin, Minnesota, sells other grocery and protein-centered items, including Skippy and Justin nut butters. The company, which has a market value of around $ 25 billion, has been an active acquirer in recent years as it diversifies. A business for Planters would be by far the largest so far.
Kraft Heinz, the product of a 2015 merger of the two well-known food companies, is divesting brands after fighting to keep up with changing consumer tastes. Ketchup maker Heinz and delicious meats Oscar Mayer said in September that the strategy will help the company simplify its business and focus on its most promising brands.
Planters was founded in 1906 by two Italian immigrants in Wilkes-Barre, Pennsylvania. Kraft Heinz in recent years saw an opportunity for the brand, as it fit the trend for low-carb, high-protein snacks. But efforts to expand it were unpredictable and it was one of six brands whose downgraded prospects led to a $ 290 million impairment loss last summer.
Kraft Heinz had net sales of just under $ 1 billion in its nut and snack segment in 2019, the last full year the company reported. The fourth quarter results will be released on February 11th.
At the beginning of the pandemic, sales of staple food for the pantry skyrocketed, taking a leap to the classics that had fallen out of favor among consumers. But as this demand declines, negotiations in the sector have increased, with companies reorganizing their portfolios to meet changing tastes.
Kraft Heinz in September agreed to sell a portion of its cheese business to France’s Groupe Lactalis SA for $ 3.2 billion. Like the cheese business, its nut business is in a highly commoditized sector that has struggled with competition from its own brands.
McCormick & Co. agreed to buy hot sauce maker Cholula in November, while Mondelez International Inc.
agreed to buy the remainder from paleo chocolate bar maker Hu Master Holdings last month.
Mr. Peanut, introduced in 1916, has appeared in Super Bowl ads in recent years. Instead of a regular announcement during Sunday’s game, Peanut is “spending” the $ 5 million normally spent on the slot machine to reward acts of kindness, Kraft Heinz said on Monday. This follows similar actions by other companies, including Anheuser-Busch – whose parent company, like Kraft Heinz, is supported by the investment firm 3G Capital – emphasizing charity in the midst of the pandemic.
Write to Cara Lombardo at [email protected] and Annie Gasparro at [email protected]
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