Kraft Heinz Co.
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approaches a business to sell his Planters snack business to peanut butter owner Skippy Hormel Foods Body.
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, according to people familiar with the problem.
A deal that would value the century-old mark at about $ 3 billion could be announced immediately next week, assuming talks do not fall apart, people said.
Planters primarily sells nuts and snack mixes, with labels featuring Mr. Peanut’s mascot, worn by tophat and monocle.
In addition to chili and delicacies, Hormel, from Austin, Minnesota, also sells other protein-concentrated foods and foods, including Skippy and Justin nut butters. The company, which has a market value of about $ 25 billion, has been an active acquirer in recent years as it diversifies. An agreement for planters would be by far the largest to date.
Kraft Heinz, the product of a 2015 merger of the two well-known food companies, gave up the brands after trying to keep up with the changing tastes of consumers. Ketchup maker Heinz and Oscar Mayer said in September that the strategy would 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, Pa. Kraft Heinz has seen an opportunity for the brand in recent years, as it fits the trend towards low-carb, high-protein snacks. But expansion efforts have been successful and were one of six brands whose low outlook led to a $ 290 million loss in depreciation last summer.
Kraft Heinz had net sales of just under $ 1 billion in its walnut and salty snacks segment in 2019, the last year fully reported by the company. It will report the results of the fourth quarter on February 11.
At the beginning of the pandemic, sales of pantry staples increased, shaking the classics that had fallen out of favor with consumers. But as this demand declines, the process of closing transactions in the sector has increased, with companies returning to reorganizing their portfolios to meet changing tastes.
In September, Kraft Heinz agreed to sell part of the cheese business to French group Groupe Lactalis SA for $ 3.2 billion. Like the cheese business, the walnut business is in an extremely comfortable sector, which has struggled with store brand competition.
McCormick & Co. agreed to buy hot sauce manufacturer Cholula in November, while Mondelez International Inc.
agreed to buy the rest of the paleo chocolate manufacturer Hu Master Holdings last month.
Mr. Peanut, introduced in 1916, has appeared in Super Bowl commercials in recent years. Instead of a regular ad during this Sunday’s game, Mr. Peanut “reveals” the $ 5 million normally spent on the slot to reward acts of kindness, Kraft Heinz said Monday. This follows similar actions by other companies, including Anheuser-Busch – whose parent company, such as Kraft Heinz, is backed by investment firm 3G Capital – highlighting the charity amid the pandemic.
Write to Cara Lombardo at [email protected] and Annie Gasparro at [email protected]
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It appeared in the February 3, 2021 print edition as “Kraft in Discussions to Sell Planters.”