Australian conglomerate Burns Philp will pay US$10m to acquire Kraft Foods’ yeast and industrial bakery ingredients business in Latin America.
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Kraft’s Latin American business operates under the Fleischmann name and has its main operations in Brazil, Colombia, Ecuador, Venezuela and Peru.
The deal marks the company’s first step towards a major offshore acquisition after the company almost collapsed three years ago after a failed global expansion.
Burns Philp, 20% owned by New Zealand entrepreneur Graeme Hart, completed a A$1.1bn refinancing programme in August aimed at restoring profitability.
The company also plans to raise debt of up to US$450m through an unsecured subordinated notes issue, subject to market conditions. The notes will have a fixed coupon and a term of 10 years, with repayment due in 2012.
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By GlobalDataBurns Philp shares added a cent but eased off to end flat at A$0.66 in line with the overall market.
“The agreement is conditional upon the negotiation of a sale and purchase agreement as well as approval by the board of Kraft Foods,” Burns Philp said in a statement.
