Kraft Heinz Co.
KHC -0.27%
is approaching a deal to sell its Snack Planters business to Skippy Peanut Butter owner, Hormel Foods Corp.
HRL 3.90%
, according to people who know the subject.
A deal, which values the centennial mark at about $ 3 billion, could be announced as early as next week, assuming the talks don’t fall apart, according to people.
Planters mainly sells nuts and snack mixes, with labels with Mr. Pet. Peanut monoculate and monocle.
In addition to its homogeneous chili meats and charcuterie, Austin, Minnesota-based Hormel sells other protein-focused groceries and foods, including Skippy and Justin nut butters. The company, which has a market value of about $ 25 billion, has been an active acquirer in recent years as it diversifies. A deal for Planters would be by far the biggest so far.
Kraft Heinz, the product of a 2015 merger of the two well-known food companies, has been breaking new ground after struggling to keep up with changing consumer tastes. Sausage maker Heinz ketchup and Oscar Mayer 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 in recent years had seen an opportunity for the brand as it adjusted to the trend towards low-carb, high-protein snacks. But efforts to expand it have been successful and were one of six brands whose narrow outlook led to a $ 290 million impairment loss last summer.
Kraft Heinz had net sales of just under $ 1 billion in the salted nuts and snacks segment in 2019, the last full year the company reported. It is expected to report fourth quarter results on February 11th.
At the start of the pandemic, sales of pantry staples increased, which shook the classics that had fallen into disgrace to consumers. But as this demand dwindles, the making of agreements in the sector has increased, and companies are reorganizing their portfolios to meet changing tastes.
Kraft Heinz agreed in September to sell part of its cheese business to French group Groupe Lactalis SA for $ 3.2 billion. Like the cheese business, its nuts business is in a highly commodified sector that has struggled with competition from store brands.
McCormick & Co. agreed to buy spicy sauce maker Cholula in November, while Mondelez International Inc.
agreed to buy the rest of paleo chocolate shovel maker Hu Master Holdings last month.
Peanut, introduced in 1916, appeared in Super Bowl ads in recent years. Instead of a regular announcement during this Sunday’s match, Mr. Peanut is “shelling out” the $ 5 million normally spent in the slot to reward acts of kindness, Kraft Heinz said Monday. This follows similar actions by other companies, including Anheuser-Busch, whose parent company, like Kraft Heinz, is backed by investment firm 3G Capital, emphasizing charity amid the pandemic.
Write to Cara Lombardo to [email protected] and Annie Gasparro to [email protected]
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It appeared on February 3, 2021, print edition as “Kraft in Conversations to Sell Planters.”