B&G Foods has pulled the sale of its Green Giant and Le Sieur vegetable businesses in Canada to Nortera Foods due to regulatory opposition.
The deal for the frozen and shelf-stable lines, agreed in October last year, was terminated on Monday (5 October) after the companies missed a 24 September deadline to secure Canadian regulatory approval.
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It followed an assessment by Canada’s Competition Bureau, which found the acquisition was “likely to lead to higher prices, fewer choices and less competition in the wholesale grocery supply”.
The watchdog had, in August, asked the Competition Tribunal to block the deal, outlining Nortera is already the domestic “dominant processor of certain canned and frozen vegetables”, and that the transaction would merge the enterprise with its “only major national brand competitor”.
Nortera markets packaged vegetables in Canada under labels including Del Monte and Arctic Gardens.
After the companies’ announcement to scrap the merger plans, Jeanne Pratt, the interim commissioner of the Competition Bureau, said: “We are pleased that a merger, which our investigation found was likely to harm competition, will not move forward.”
In a filing with the US Securities and Exchange Commission yesterday (6 October), B&G said it would continue reviewing “strategic and operational” options for the Green Giant business in Canada.
These include potential sales, partnerships, or alternate moves to “maximise value for shareholders”, the filing read.
Robert Mills, the president and CEO of B&G Foods, added in a separate statement: “Although we are disappointed that the transaction was not completed before the outside date, we remain highly confident in Green Giant Canada’s future.”
Nortera will continue acting as the primary co-manufacturer for Green Giant in Canada.
The company will pay US$1.6m to B&G Foods as a break-up fee and reimbursement for select legal costs.
Erwan Hédiard, the interim CEO and finance chief of Nortera, said: “While this transaction will not move forward, Nortera remains fully committed to vegetable production and processing in Canada and to the long-term strength of our industry.”
The planned divestiture is part of New Jersey-based B&G Food’s ongoing drive to lower debt.
In March, the company offloaded its US Green Giant frozen operations to Seneca Foods in an agreement covering an Arizona manufacturing facility, inventory, and intellectual property, with a supply arrangement for its site in Irapuato, Mexico.
That transaction followed last year’s sale of its US Le Sueur shelf-stable line to McCall Farms and the November 2023 disposal of the US Green Giant shelf-stable business to Seneca Foods under a brand licensing framework.
