Nestlé is reportedly stepping up efforts to sell its Herta meats business after the Swiss food giant was said to have hired bankers in February to arrange the disposal of the frankfurter maker.
Chief executive Mark Schneider put the unit up for review earlier in the year as Nestlé seeks to increase its focus on the “high growth” plant-based category. The review covers Herta charcuterie products in France, Germany, Belgium, Luxembourg, the UK and Ireland. The products generated sales of about CHF680m (US$679.1m) in 2018. Nestlé will keep and develop the Herta-branded dough and vegetarian businesses.
Reuters reported at the time German meat producer Reinert Group was among the potential buyers, along with private-equity firms.
Bloomberg is now reporting, quoting people familiar with the proceedings, that Herta may attract interest from US packaged meat firm Smithfield Foods and commodities heavyweight Cargill, along with Tyson Foods, China’s COFCO, and Sigma Alimentos of Mexico.
Nestlé is working with an adviser to divest the Herta assets in a deal that could be worth US$800m to $1bn and is preparing to send out marketing materials to potential bidders, said the people, who asked not to be identified as the information is private. Reuters said in April that Rothschild had been hired to explore a sale of the business.
Deliberations are at an early stage and there’s no guarantee the talks will lead to a transaction, the people quoted by Bloomberg said.
The news service said representatives for Nestlé, Cargill, Smithfield, and China’s WH Group, which owns Smithfield, declined to comment, while COFCO and Sigma didn’t respond to requests for comment.
A Nestlé spokesperson told just-food today (11 April) the company does not “comment on speculation”.