US: Heinz takes US$60m charge on Foodstar acquisition
Heinz sees Foodstar growth
Heinz has said that third-quarter earnings will be hit by an early payout of US$60m in connection to its 2012 acquisition of Chinese soy sauce maker Foodstar.
Quarterly earnings are expected to be reduced by $0.04 a share.
The payment, which is in addition to the $165m purchase price, was calculated based on Foodstar's performance. The payment to Foodstar's previous owners - Transpac Industrial Holdings and various Transpac Funds - is 20% higher than Heinz' original provision. The company attributed the disparity to the "outstanding financial performance" of Foodstar in China.
"Heinz has received a strong return on our investment in Foodstar, which is well-positioned to deliver continued growth in China's $4bn soy-sauce market," Heinz's CEO William Johnson said. "Foodstar has delivered excellent results and has performed well beyond our expectations since joining Heinz."
In November, Heinz said its second-quarter profit rose by 22% thanks to growth in emerging markets and a lower tax rate.
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