HJ Heinz Company has received an offer and is in advanced and exclusive negotiations with Lehman Brothers Merchant Banking for the sale of its European Seafood business, the food group has said.
The terms of the offer were not disclosed. However, Heinz said that a transaction would require an opinion from the French Works Council and communications with other relevant employee representatives in Europe. A transaction would also be subject to customary EU competition review and approval.
William R. Johnson, Heinz chairman, president and CEO, said: “The proposed sale of our European Seafood business is consistent with our global growth strategy to drive sales and earnings in three core categories and follows successful initiatives this year to divest other non-core businesses such as HAK vegetables, Hain Celestial and our pending sale of Tegel poultry. Over the past three years, Heinz has derived multiple benefits from a similar plan to simplify its portfolio in North America and the company believes it can improve performance in Europe through a similarly more focused portfolio of strong brands.”
A sale would include brands such as John West, a leading brand of canned tuna and seafood in the UK, Ireland and the Netherlands; Petit Navire, the top canned tuna brand in France; and Mareblu in Italy along with four seafood processing facilities. The European Seafood business has approximately 5,000 employees and annual sales of over EUR400m (US$482m) and produces more than 400m cans of seafood products annually.
“Our goal is to drive growth and innovation in Europe by investing in the three core categories of Ketchup, Condiments and Sauces; Infant Nutrition; and Meals and Snacks,” said Joe Jimenez, president and CEO, Heinz Europe.
The major seafood processing facilities included in the offer are located in the Seychelles, where the plant has approximately 2,400 employees, and in Ghana, where there are 1,800 employees. Other manufacturing facilities include Douarnenez, France and Peniche, Portugal.
“Heinz notified employees of the offer this morning. We will work closely with the French Works Council to review the offer and no agreement will be entered into until we receive an opinion from the French Works Council,” Jimenez said. A transaction is expected to be completed by the end of April, 2006.
On 20 September, 2005, Heinz announced that it would seek buyers for its European Seafood business and, separately, its European Frozen Foods business, as part of a strategic plan to improve its performance in Europe, which remains a key market for Heinz.