Pacific Equity Partners (PEP) are poised to buy a New Zealand poultry firm, Tegel Foods, from HJ Heinz for an undisclosed sum.

HJ Heinz said today that it has signed a definitive agreement to sell its Auckland, New Zealand subsidiary to PEP, for an undisclosed amount.

Tegel Foods is a leading processor of fresh poultry and animal feeds. It markets Tegel brand chilled and frozen chicken and turkey products and operates processing plants, feed mills and livestock operations throughout New Zealand. Tegel was purchased by Heinz in 1992 as part of a transaction to acquire Wattie's.

William R. Johnson, Heinz chairman, president and CEO said: "The company is making very good progress in accomplishing its objective of divesting non-core businesses and expects that total proceeds from all non-core divestitures will approximate US$1 billion. The divestiture of Tegel Foods represents another important step in executing our strategic plan to focus on core categories in which Heinz has unique strengths, namely condiments & sauces; meals & snacks; and infant nutrition. Tegel is a strong brand and a company with excellent management, but the poultry business is not aligned with our strategic focus. Heinz remains committed to the core New Zealand market with its strong Wattie's business."

Heinz executives discussed the potential sale of a number of non-core businesses, including Tegel, during meetings and conference calls with investors in August, September and November.

Recently, Heinz has completed the divestitures of HAK vegetables in the Netherlands and its seafood business in Israel, and is finalising the sale of its stake in The Hain Celestial Group, Inc in the US.

Closing of the transaction is subject to approval of the New Zealand Overseas Investment Office.