CHICAGO — The Kraft Heinz Co.'s nuts business is changing hands. The company entered into a definitive agreement to sell its nuts business to Hormel Foods Corp. in a cash transaction for $3.35 billion.
The deal 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, in addition to global intellectual property rights to the Planters brand, subject to existing third-party licenses in certain international jurisdictions, and to the Corn Nuts brand.
Additionally, under terms of the agreement, Kraft Heinz will sell its Corn Nuts production facility in Fresno, Calif., and Planters production facilities in Fort Smith, Ark., and Suffolk, Va. These facilities and their employees will continue to operate normally.
"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."
According to Kraft Heinz, as part of its operating model, consumer-driven platforms and platform roles help focus its efforts within each geographic segment, adding that the company 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 Paulo Basilio, chief operating officer for Kraft Heinz. "As we move forward, we plan to continue deleveraging as we explore accretive investments to accelerate our strategy."
The sale of its nuts business contributed approximately $1.1 billion to Kraft Heinz's net sales for fiscal year 2020, primarily in the U.S. segment.
Perella Weinberg Partners served as the exclusive financial advisor to Kraft Heinz for the transaction, while Gibson, Dunn & Crutcher LLP served as its legal advisor.
The deal is expected to close in the first half of 2021 and is subject to regulatory review and approval.
Hormel Foods, based in Austin, Minn., is a multinational manufacturer and marketer of high quality, brand name food and meat products for consumers around the globe. The company sells products under some of the world’s most iconic brand names including Hormel pepperoni, Applegate natural and organic meats, Jennie-O turkey, Skippy peanut butter, Black Label bacon, Wholly Guacamole dips, Columbus meats, Justin’s nut butters, Hormel chili, Muscle Milk sports nutrition drinks and SPAM products.
The Kraft Heinz Co., headquartered in Chicago, reported $26 billion in net sales in 2020.