Heinz Completes Acquisition of Foodstar, to Accelerate Growth in China

Johnson: “The acquisition of Foodstar gives Heinz a solid growth platform in China’s rapidly expanding $2 billion plus retail soy sauce market. It also accelerates our growth in China, a key Emerging Market where Heinz is already well-positioned with our growing infant nutrition business and Long Fong, a leading brand of frozen dim sum.”

Nov 5 2010 --- H.J. Heinz Company has completed its acquisition of Foodstar, a leading manufacturer of premium branded soy sauces and fermented bean curd in China, from Transpac Industrial Holdings Ltd., a private equity holding company, and various Transpac Funds. The purchase price consists of a cash payment of $165 million and a potential earn-out payment in 2014 based on the performance of the business.

Commenting on the transaction, Heinz Chairman, President and CEO William R. Johnson said: “The acquisition of Foodstar gives Heinz a solid growth platform in China’s rapidly expanding $2 billion plus retail soy sauce market. It also accelerates our growth in China, a key Emerging Market where Heinz is already well-positioned with our growing infant nutrition business and Long Fong, a leading brand of frozen dim sum.”

Mr. Johnson added: “Foodstar’s excellent brands are well-positioned in southern China and are a natural fit with Heinz’s core capabilities in sauces. Our goal is to drive the growth of these popular brands by leveraging our Company’s global scale and expertise in innovation, marketing, sales and distribution in China.”

Heinz first announced the Foodstar agreement on June 21, 2010. The acquisition of Guangzhou-based Foodstar includes four manufacturing sites with 2,500 employees in China and a fifth manufacturing facility that is under construction in Shanghai. Heinz expects the acquisition to boost its annual sales in China to about $300 million in the first full year.

Foodstar’s Master Weijixian premium soy sauce brand is a leader in Weijixian soy sauce in the southern region of China. Foodstar’s Guanghe fermented bean curd, a popular flavor enhancer that is used in cooking and on food, is also a strong brand in the region.

Through the acquisition, Heinz gains a share of a retail soy sauce market in China that is growing at a dynamic rate of 7% to 8% a year. Foodstar’s Master brand is a strong brand in the Weijixian soy sauce segment, which has been growing at an even higher rate than the total soy sauce category in China.

Heinz already produces ABC, a leading brand of soy sauces in Indonesia, another key Emerging Market for the Company, and it sells other soy sauces like Amoy® in multiple markets around the world.

Heinz will discuss the acquisition of Foodstar as part of its second quarter earnings conference call on November 19.