With a number of brands, including Chi-Chi’s, Herdez, La Victoria, Embada and Dona Maria, MegaMex will initially generate revenue of around US$200m.
“This expanded, long-term agreement with Herdez Del Fuerte is an example of how we continue to look to diversify our product portfolio… MegaMex Foods will have the scale and skill set to establish leadership in Mexican foods and grow the category,” said Jeffrey Ettinger, chairman of the board, president and chief executive officer at Hormel Foods.
MegaMex Foods will operate as a stand-alone entity with an independent management team based in Chino, California.
It will look to leverage the core competences of its parent companies, such as manufacturing, R&D and supply chain management.
“MegaMex Foods will combine the premier Mexican food products and brands of Herdez Del Fuerte with the strength in manufacturing and distribution of Hormel Foods,” Juan Marco Gutiérrez Wanless, chairman at Herdez Del Fuerte, added.
MegaMex is expected to be operating around 26 October this year, which coincides with the start of fiscal year 2010 for Hormel Foods.
The deal is conditioned upon the parties reaching agreement on the joint venture structure and ancillary agreements relating to product manufacturing, management services, and product and trademark licenses, and upon other customary conditions.