Wed, 19 Jul 2017 | DIVISION SALE
The UK maker of French’s mustard, Nurofen and Durex condoms is poised to offload its food division to US consumer good firm McCormick.
Reckitt Benckiser, which also owns household brands Dettol, Cilit Bang and Lemsip, will sell off the division to the American firm in a deal worth $4.2 billion (£3.2 billion) after entertaining deals with Unilever and Hormel Foods.
It is understood that McCormick has identified hot sauce and seasoning products as fast-growing parts of the business, called RB Foods, and will retain top brands like French’s, Frank’s RedHot and Cattlemen’s.
The US seasoning maker has been trying to expand its global reach and last year approached Premier Foods, the owner of British names such as Mr Kipling and Oxo stock cubes, for takeover. McCormick was ultimately unsuccessful, however, after being unable to raise the cash necessary for the deal to go through.
Lawrence Kurzius, McCormick’s chief executive, said he hoped that the deal would render his firm “a one-stop shop for condiment, spice and seasoning needs”.
He added that he expects “meaningful accretion” to the food division’s margins and adjusted earnings. McCormick predicts that, as a combined entity, pro forma net sales are set to reach $5 billion.
According to research by business intelligence firm IBISWorld, the US sauce and condiments market is worth around $21 billion annually.
Reckitt Benckiser, on the other hand, will hope that proceeds from the sale will help pay off debts incurred after agreeing to buy maker Mead Johnson in a deal worth $16.6 billion.
The firm's CEO, Rakesh Kapoor, said: "Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene."
Credit Suisse is advising McCormick on the deal, while Cleary Gottlieb Steen & Hamilton LLP is the legal counsel.
Search food businesses for sale
Subscribe to the Business Sale Report here
Luxury kennels and cattery with professional grooming parlour (licensed for 142 dogs and 26 cats) in Peterborough for Sale. An opportunity to acquire this luxury kennels and cattery with stunning spacious four bedroom detached residence which must be...
LEASEHOLD
The business has been established for a number of years and has been owned and operated by the founder since that date. Offers invited.
FREEHOLD
Situated in the heart of Ilkley town centre just off the busy Brook Street. The yard is a stylish bar offering a wide range of drinks, good, quality food, music with varied DJ’s and live artists all encompassed in an interesting layout. Offers invite...
FREEHOLD
|
22
|
|
Mar
|
Scunthorpe nightclub up for sale | BUSINESS SALE
A former nightclub based in Scunthorpe has been put up for s...
|
21
|
|
Mar
|
Kent Logistics provider completes a successful acquisition | BUSINESS SALE
A Kent-based personalised logistics provider, backed by Livi...
|
20
|
|
Mar
|
Warrington construction company enters administration | ADMINISTRATION
A prominent construction business headquartered in Orford Gr...
Sign up to receive our acquisition alert emails to get your FREE guide
|
03
|
|
Apr
|
Reckitt Benckiser eyes sale of £2bn food division | BUSINESS SALE
Reckitt Benckiser, the British consumer goods giant, is cons...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources