Nestlé has sold the pizza manufacturing plant in France that was at the centre of a fatal E. coli outbreak to Italy’s Italpizza.

The deal, first mooted back in November, was confirmed by the Italian frozen pizza supplier.

Modena-based Italpizza revealed it has now set up a new French subsidiary, Mantua, to run its operation there. In addition to the undisclosed cost of the acquisition, Italpizza will allocate more than €12m ($12.9m) of investment for modernisation work in a multi-year plan that will extend to 2028.

The company will produce pre-baked products on the two production lines at Caudry. The resumption of production is planned for this autumn, “depending on administrative progress”.

Italpizza said it has already secured deals for production volumes and has started a process of recruiting around 20 employees.

It said production staff will be recruited in a second phase with the company stating an ambition to hire around 140 employees before the end of 2028.

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By GlobalData

Cristian Pederzini, president of Italpizza, said: “The acquisition of the Caudry establishment is fundamental for Italpizza because it is part of a vast internationalisation project that we have been carrying out for several years.

“Due to its location and its economic attractiveness, the location of the Caudry production site is strategic because it allows us to get closer to strongly growing northern European markets.”

Just Food has asked Nestlé for its comments on the deal.

The Switzerland-based company said in a statement three months ago a deal could be finalised by the start of 2024 after consultation with staff.

Last March, the world’s largest food maker – behind brands such as KitKat chocolate and Maggi sauces – said it was closing the plant in the Hauts-de-France region in the wake of the E. coli outbreak in 2022, despite having received the go-ahead to reopen the line unaffected by the recall some three months earlier.

Dozens of children fell sick after eating contaminated food – and two died. In April 2022, the Paris prosecutor’s office opened an investigation into alleged involuntary manslaughter. Health officials ordered output at the factory to cease five days later.

According to Nestlé, the results of an internal investigation at the plant confirmed “the most likely hypothesis: flour contamination by E. coli STEC bacteria”.

The Caudry site was excluded from a deal Nestlé subsequently struck to run its pizza business in Europe with PAI Partners.

Founded in 1991, Italpizza, owned by Dreamfood, has six factories supplying more than 60 markets. It has a turnover of around €400m and employs more than 1,700 workers.