Heinz Takes Saucy Step with Acquisition of HP, Lea & Perrins

Food Creation, FoodProcessing.com

By adding HP and Lea & Perrins to its stable, Heinz now dominates the global market for sauces and condiments.

H.J. Heinz Co. announced June 20 that it has signed a definitive agreement with Groupe Danone S.A. to acquire a number of leading culinary sauce brands for GBP 470 million (approximately US$855 million) in cash. The transaction includes the HPand 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. This acquisition will strengthen Heinz's global condiments and sauces business and make it the sauces leader in the U.K.

Heinz Chairman, President and Chief Executive Officer William R. Johnson said: "The acquisition of these brands is consistent with our strategy to drive growth in our profitable and expanding core condiments and sauces category. We will add two of the world's best-known sauce names, HP and Lea & Perrins, to our global basket of iconic condiments and sauce brands, such as Heinz, ABC, Classico and Wattie's. Heinz also will gain a perpetual license to sell the rapidly growing Amoy brand of Asian sauces throughout Europe."

"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 and sauces; meals and snacks; infant nutrition; and foodservice. 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," Mr. Johnson added.

The acquisition is expected to close during the next few months, pending all regulatory approvals.

Heinz Global Review

On May 26, Heinz announced a strategic review of its European portfolio and global structure. The review places emphasis on Heinz's four core businesses and on its big number-one and number-two brands. Heinz intends to focus on its large markets and its four primary developing markets of Russia, Indonesia, China and India.

Heinz also announced its intention to divest non-core products, such as the HAK line of prepared vegetables in Northern Europe, and that it is undertaking an evaluation of its non-core seafood and frozen businesses in Europe and the Tegel poultry business in New Zealand.

HP and Lea & Perrins Brands The Lea & Perrins brand is the world's number-one Worcestershire sauce and the market leader in the United States, Canada and the U.K. The HP brand of savory sauce is a leader in both Canada and the U.K. Both brands are exported worldwide to more than 75 countries and sold through retail and foodservice channels alike. Along with Heinz Ketchup, HP and Lea & Perrins sauces sit proudly atop tables and counters in restaurants worldwide. The HP name (which stands for Houses of Parliament) has long been Britain's number-one savory table sauce. Lea & Perrins is truly an historic global brand. The famous Worcestershire sauce has literally traversed the globe since 1837 when it was served on the tables of ocean liners that traveled in and out of British waters. Today, the Lea & Perrins and HP brand sauces maintain their acclaim and are regularly featured as essential ingredients in contemporary recipes created by celebrity chefs and restaurateurs. HP Foods employs approximately 450 workers at three factories. Two are located in the U.K. at Aston Cross, Birmingham; and Worcester, Worcestershire. The North American production facility is in Fair Lawn, N.J. Amoy Sauce The Amoy brand of Asian varieties is popular in more than 40 countries. The line, which was first created in China in 1908, continues to expand and includes ever-popular soy and stir-fry sauces and noodles.