Swedish vegetable oil manufacturer AarhusKarlshamn (AAK) has commenced final negotiations to acquire the wet foods division of Lion Foods for GBP14m (US$25m). The company said that the purchase would extend AAK’s UK sauces, dressings and marinades business.

The deal includes rights to the long-established Lion brand name in the wet foods sector, with AAK suggesting that it has plans to re-launch the brand.

“The acquisition will further strengthen the market position in the food service segment. These products have been particularly successful in export markets,” said Ian McIntosh AAK UK president.

The new business will trade as AAK Foods and will continue to operate from its Runcorn site where it is expecting to employ around 130 staff.

“We will strive for a growing proportion of high value-added speciality products and attractive contribution margins. A vital step in this direction is the acquisition of the wet foods division of Lions Food Ltd,” Jerker Hartwall, president and CEO of AAK, said.

The acquisition, the company said, is expected to generate profit from 2007 after integration with the AAK UK organisation.