Heinz Acquires Big Sauce Brands

    June 20, 2005
    Chris Crum

H.J. Heinz Company, of Heinz Ketchup fame, has agreed to buy Groupe Danone, which makes HP and Lea & Perrins sauces. The deal is for about $855 million in cash.

“We will add two of the world’s best-known sauce names, HP and Lea & Perrins, to our global basket of iconic condiments & sauce brands, such as Heinz, ABC, Classico and Wattie’s,” said Heinz Chairman, President and CEO William R. Johnson.

Heinz Acquires Big Sauce Brands

In addition to HP and Lea & Perrins, the transaction will include a perpetual license for Heinz to market Amoy Asian sauces and products in Europe.

“The acquisition of these brands is consistent with our strategy to drive growth in our profitable and expanding core condiments and sauces category,” Johnson said.

These three brands combined bring in about $300 million a year in sales. They are primarily marketed in the United States, the United Kingdom, and Canada. According to Reuters,

Heinz fought off a strong field of potential buyers including UK groups Associated British Foods and Premier Foods and also New York-based sauces and spices group McCormick & Co. Inc..

Danone will gain 600 million euros from exiting the brewing business, which it announced in May when it sold a 33.34 percent stake in Spain’s second largest brewer, Mahou, back to the brewer’s majority family shareholders.

“This acquisition underscores our commitment to become a faster-growing, more focused company. It also is in line with our strategy of growth in our four core businesses of ketchup, condiments & sauces; meals & snacks; infant nutrition; and foodservice. We have identified many opportunities to expand sales of the HP, Lea & Perrins and Amoy brands. Once concluded, we expect the acquisition to be accretive in the first full fiscal year,” Mr. Johnson added.

The acquisition is expected to reach completion within the next several months. It is still subject to all regulatory approvals. Reuters reported that Danone’s shares were off 0.88% at 73.55 euros by 1100 GMT.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.