Acquisition speculation has once more caught the food industry's imagination, as it appears that Heinz is jumping on the US consolidation craze wagon and is close to completing its largest overseas buyout. Sources are revealing that the US sauce giant has offered US$380m for the food-products division of Dutch food and ingredients manufacturer CSM, and that a positive announcement can be expected at any time over the next few days.

Heinz, which already controls the StarKist tuna and 9-Lives pet food brands as well as its flagship ketchup and baked beans, has focused on aggressive overseas expansion over the last few years. The group paid US$300m to extend its European frozen food business last year by acquiring United Biscuits Frozen & Chilled Foods (which produces San Marco pizzas and the Linda McCartney vegetarian brand) and, over all, sales in Europe amounted to 28% of the company's 1999 sales of US$9.3bn.

At present, US sales gross just 55% of the company's revenue, and this could fall even further with the significant European sales boost offered by the CSM division, which produces annual revenue of around US$315m.

Heinz is said to be very excited about the acquisition, which will also see it head up CSM's own recent acquisition of Unilever's European bakery supply business (for which it paid US$625.6m), a growing line of sports and fortified drinks called KDR and the Honing brand of soups, sauces and pasta that alone generates more than US$100m in annual sales.

Spokesmen at Heinz declined to comment, but stock value has been seen rising after years of relatively small sector growth. Before Heinz shareholders get too excited however, sources also revealed that there are a number of unresolved issues that may still bar completion of the deal.