US food groups Fresh Del Monte Produce and Pinnacle Foods are understood to be considering offers for the canned food business of Del Monte Foods.
Reports emerged last month Del Monte Foods was exploring the possible sale of its canned food business. Centerview Partners and Morgan Stanley were said to have been hired to assist in the sale of the business.
Reuters yesterday (9 July) cited Pinnacle and Fresh Del Monte as potential acquirers. Unnamed sources said Del Monte is speaking to companies in the food industry about the sale and has not focused on talks with private-equity buyers. The process is said to be still in the “early stages”. A deal, Reuters said, could be valued at over US$1.5bn.
A sale of Del Monte’s canned food business would allow the firm to focus solely on its pet food business, which includes brands such as Milk-Bone and Kibbles ‘n Bits.
Last month, the company signed a merger agreement with Natural Balance Pet Foods, a maker of super-premium pet food for dogs and cats sold throughout North America, Europe and Asia. The deal, Del Monte said, was consistent with its long-term strategy of further strengthening its pet food and snacks brand portfolio.
In its nine-month results in March, the firm saw pet product sales grow by 8% compared to a 0.7% increase in its consumer products division.
Pinnacle Foods declined to comment on the reports, while Fresh Del Monte did not return a request for comment at the time of going to press.
Click here for our Deal or no deal analysis of the potential sale of Del Monte’s canned food business.