Kraft Heinz Co, an American food company, is currently in talks with Skippy peanut butter manufacturer, Hormel Foods Corp. The discussions have been initiated in a bid to sell the food company’s Planters snack business to Hormel Foods for nearly $3 billion.
The agreement is expected to be entered by next week following the successful completion of the ongoing discussions. Sources familiar with the matter have reportedly cited that it is likely to be the largest agreement signed by the peanut butter manufacturer to date.
The Planters snack business mainly produces nuts & snack mixes with labels featuring the popular Mr. Peanut mascot. This business will be the latest addition to Hormel’s portfolio, which includes items such as condiments, frozen meats, and chillis.
In the wake of the COVID-19 pandemic, the consumption of pantry staple foods surged considerably due to the impact of the lockdowns and other regulations imposed by the government to reduce the spread of the virus. As these restrictions are gradually getting lifted, global companies have started restructuring their businesses.
Kraft Heinz and Hormel declined to respond to requests for comments.
In addition to this potential deal, in September 2020, Kraft Heinz sold its natural cheese business to France-based Groupe Lactalis for $3.2 billion. The company also planned to increase its spending on product marketing by 30% to around $1.4 billion. This initiative has been expected by many shareholders after Miguel Patricio, a media and advertising veteran, took over the Chief Executive role in July 2019. After the announcement of this business sale, the company’s shares also increased by 4.6%. It further revealed plans to sell the natural, cultured, grated, and specialty cheese businesses in the U.S., such as its Breakstone’s & Cracker Barrel brands, to Lactalis.
Furthermore, in January 2021, Mondelez International Inc bought the chocolate-bar manufacturer, Hu Master Holdings.