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March 13, 2019

Kraft Heinz ‘mulls sale of Breakstone’s dairy business’

Embattled US food giant Kraft Heinz has been linked with a possible sale of one of its dairy businesses.

By Leonie Barrie

Embattled US food giant Kraft Heinz has been linked with a possible sale of its dairy business Breakstone’s.

Media outlet CNBC, quoting people familiar with the situation, said Kraft Heinz has hired Royal Bank of Canada to review options for Breakstone’s, which makes sour cream and cottage cheese, and that a sale could be worth US$400m.

It reported the potential sale is part of a broader Kraft Heinz review of its dairy operations as it looks to pay down debt.

The ketchup, soup and baked beans maker has endured a torrid few weeks. Last month it saw its share price take a nosedive after it revealed it had taken a $15.4bn writedown, primarily on its Kraft and Oscar Mayer brands and Canadian assets.

And after announcing a fourth-quarter loss of $12.6bn, the company further revealed it has faced a US Securities and Exchange Commission probe related to its purchasing and accounting practices.

At the start of this month, it emerged Kraft Heinz is facing a class action lawsuit questioning why an affiliate of controlling shareholder and co-owner 3G Capital transferred $1.23bn of stock six months before the writedown and loss announcements.

Breakstone’s can trace its roots back to 1882 when it was established in New York by immigrant brothers from Lithuania.

A spokesperson for Kraft Heinz declined to comment on its possible sale when contacted by CNBC.

just-food has also asked Kraft Heinz for a response to the story, a request made outside US office hours.

Last year, Kraft Heinz announced the sale of its Canadian natural cheese business to Italian dairy group Parmalat, owned by France’s Lactalis, for $1.23bn. 

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