Kraft Heinz Co. (KHC) Tuesday said it has agreed to sell its Canadian natural cheese business to Parmalat forC$1.62 billion. The deal includes the sale of natural cheese brands Cracker Barrel, P'tit Quebec and aMOOza! in the Canadian market.
The transaction is expected to close in the first half of 2019, subject to regulatory review and approval.
"We're excited about what this transaction means for our future growth and business in Canada," said Bernardo Hees, Chief Executive Officer of Kraft Heinz. "We also believe Parmalat is uniquely positioned to advance the natural cheese business given their experience and focus on the dairy industry. At the same time, we can focus on the segments and categories where we have stronger brand equity, competitive advantage and greater growth prospects."
Kraft Heinz will sell its production facility located in Ingleside, Ontario. Kraft Heinz Canada will also transfer approximately 400 employees from that facility to Parmalat.
Kraft Heinz will continue to own and market its other cheese products, including Philadelphia, Cheez Whiz and Kraft Singles, which are processed in Mount Royal, Quebec, where Kraft Heinz Canada employs approximately 900 employees.
The natural cheese business being sold contributed about C$560 million to Kraft Heinz's net sales in 2017.
Kraft Heinz expects to use proceeds from the sale to pay down debt, with reduced interest expenses expected to offset the majority of EPS dilution on a run-rate basis.(dpa)