Kraft Heinz Co.
KHC -0.27%
is working on a deal to sell its snack business Planters to Skippy Peanut Butter owner Hormel Foods Corp.
HRL 3.90%
, according to people familiar with the matter.
A deal that values the century-old brand at about $ 3 billion could be announced as early as next week, assuming the talks do not fall apart, the people said.
Planters sell mainly nuts and snack mixes, with labels bearing the mascots Mr.
In addition to its chili and delicacies of the same name, Hormel sells in Austin, which is in Minn. based, also other groceries and protein-centric foods, including Skippy and Justin’s nut butter. The company, which has a market value of about $ 25 billion, has been an active acquirer for the past few years as it diversifies. An agreement for Planters would be by far the largest to date.
Kraft Heinz, the product of a merger of the two well-known food businesses in 2015, has given up brands after struggling to keep up with the changing consumer tastes. The producer of Heinz ketchup and Oscar Mayer deli meat said in September that the strategy would help the company simplify its business and focus on its most promising brands.
Planters was founded in 1906 by two Italian immigrants in Wilkes-Barre, Pa. Kraft Heinz has seen opportunity for the brand over the past few years, as it fits the trend toward low-carb protein-rich snacks. But efforts to expand it were hit and miss, and it was one of six brands whose declining outlook led to a $ 290 million impairment loss last summer.
Kraft Heinz had net sales of just under $ 1 billion in its nuts and salty snacks segment in 2019, the last full year the company reported. The results of the fourth quarter are reported on February 11th.
At the start of the pandemic, sales of pantry staples rose, giving a stir to classics that fell outside the consumer’s favor. But as demand declined, trade in the sector increased, and companies revised their portfolios to meet different tastes.
Kraft Heinz agreed in September to sell part of its cheese business for $ 3.2 billion to French Groupe Lactalis SA. Like the cheese industry, its nut industry is in a very commodity sector that has struggled with competition from retail brands.
McCormick & Co. agreed to make Cholula in hot sauce, while Mondelez International Inc.
agreed to buy the rest of the paleo-chocolate manufacturer Hu Master Holdings.
Mr. Launched in 1916, Peanut has appeared in Super Bowl commercials for the past few years. Instead of a regular advertisement during Sunday’s game, “Peanut” shelled out the $ 5 million usually spent on the lock to reward acts of kindness, Kraft Heinz said Monday. This follows similar actions by other companies, including Anheuser-Busch – whose parent company, such as Kraft Heinz, is backed by investment firm 3G Capital – which highlights charity amid the pandemic.
Write to Cara Lombardo at [email protected] and Annie Gasparro at [email protected]
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In the print edition appears on February 3, 2021 as ‘Power in talks to sell planters.’