Heinz swoop for HP Foods in $855 million move

20/06/05 Heinz has acquired British condiment company HP Foods from Groupe Danone in a £470 million ($861.3 million) deal. Heinz is thought to have beaten off competition from Premier Foods and Associated British Foods. The move brings together the two iconic sauce brands in the UK – Heinz Ketchup and HP Brown Sauce.

The transaction includes the HP and Lea & Perrins brands and a perpetual license to market Amoy Asian sauces and products in Europe. These brands, marketed primarily in the U.K., United States and Canada, have approximately $300 million in worldwide annual sales. Heinz said that the acquisition will strengthen its global condiments & sauces business and make it the sauces leader in the UK.
 
"This acquisition underscores our commitment to become a faster-growing, more focused company. It also is in line with our strategy of growth in our four core businesses of ketchup, condiments & sauces; meals & snacks; infant nutrition; and foodservice," said Heinz Chairman, President and Chief Executive Officer William R. Johnson. "We have identified many opportunities to expand sales of the HP, Lea & Perrins and Amoy brands. Once concluded, we expect the acquisition to be accretive in the first full fiscal year," Johnson added.

Heinz said in May that it was reviewing its international businesses. It is considering selling some units, including seafood and frozen foods businesses in Europe, the Weight Watchers products and the Linda McCartney vegetarian line.

Bids for HP came at a busy time for the UK food production industry, with Premier snapping up the maker of meat alternative Quorn from private equity firm Montagu earlier this month. Quorn will be Premier’s largest brand, joining labels such as Ambrosia custard, Branston Pickle, HP sauce and Typhoo Tea.