Unilever To Sell Ragu, Bertolli Brands To Japan's Mizkan For $2.15 Bln In Cash

(RTTNews) - Anglo-Dutch consumer goods giant Unilever Plc (UN, ULVR.L, UL) Thursday said it has agreed to sell its North America pasta sauces business under the Ragu and Bertolli brands to Japan's Mizkan Group for about $2.15 billion in cash. According to the firm, the sale is the final step in the restructuring of its North American portfolio.

The sale is expected to close by the end of June, subject to regulatory approval and customary closing conditions.

In the deal, the privately held Japanese food manufacturer would buy two production facilities, including a sauce processing and packaging facility in Owensboro, Kentucky, and a tomato processing facility in Stockton, California. Ragu and Bertolli's annual turnover is more than $600 million.

Commenting on the sale, Kees Kruythoff, president of Unilever North America, said, "This sale represents one of the final steps in reshaping our portfolio in North America to deliver sustainable growth for Unilever, and enables us to sharpen our focus within our foods business. The Ragu and Bertolli business leads the pasta sauce category in the United States, and we believe that the potential of both brands can be fully realized with Mizkan."

While announcing first-quarter results in late April, Unilever had said that it is undertaking a strategic review of North America pasta sauces business and the Slim. Fast brand, consistent with its commitment to rigorously review its portfolio.

The company then had noted that North American region had a slow start to the year, and revenues declined due to the timing of Easter, the decline of the margarine market and weak sales in dressings, despite competitive growth from the Personal Care brands.

For Mizkan, the acquisition builds on its plans for global expansion of its retail, branded, food ingredients and food services businesses. The maker of condiments and sauces started as a rice vinegar maker in central Japan more than 200 years ago. The company reportedly aims to expand its international operations to counterbalance weak domestic market due to Japan's aging population.

In the US, Mizkan started its full-scale business in 1981 with acquisition of the vinegar manufacturer American Industry. The Illinois-based Mizkan Americas, Inc. has been expanding its business with its acquisitions of well-established US brands such as cooking wine firm Holland House in 2005, and marinades and BBQ sauces distributor World Harbors in 2010. In May 2011, the company entered the Hispanic food market through the acquisition of the Border Foods, Inc., a processor of Green Chile, Jalapeño and Tomatillo peppers.

Unilever shares are losing 0.23 euros or 0.70 percent in Amsterdam, and trading at 31.72 euros, and losing 29 pence or 1.08 percent in London, and trading at 2,666 pence.