The Kraft Heinz Co. has entered into a definitive agreement to sell its nuts business to Hormel Foods Corp. in a cash transaction for $3.35 billion.
The proposed transaction is expected to close in the first half of 2021, subject to regulatory review and approval.
The transaction includes most products sold under the Planters brand, including single variety and mixed nuts, trail mix, Nut-rition products, Cheez Balls, and Cheez Curls, as well as Corn Nuts branded products. The transaction also includes global intellectual property rights to the Planters brand, subject to existing third-party licenses in certain international jurisdictions, and to the Corn Nuts brand.
“This is another momentous step in our rapid transformation of Kraft Heinz,” said Kraft Heinz CEO Miguel Patricio. “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.”
As part of the Kraft Heinz operating model, consumer-driven platforms and platform roles help to focus its efforts within each geographic segment. Kraft Heinz prioritizes growth areas and takes strategic actions where appropriate.
“This is a great example of using agile portfolio management to improve our growth trajectory,” said Kraft Heinz CFO Paulo Basilio. “As we move forward, we plan to continue deleveraging as we explore accretive investments to accelerate our strategy.”
The business being sold contributed approximately $1.1 billion to Kraft Heinz’s net sales for fiscal year 2020, primarily in the U.S. segment.
Under the terms of the agreement, Kraft Heinz will sell its Corn Nuts production facility in Fresno, CA, and Planters production facilities in Fort Smith, AR, and Suffolk, VA. These facilities and their employees will continue to operate in ordinary course.
Perella Weinberg Partners served as the exclusive financial advisor to Kraft Heinz for this transaction, while Gibson, Dunn & Crutcher LLP served as its legal advisor.