Mizkan to Acquire Ragu and Bertolli from Unilever

May 22, 2014
$2.15 billion transaction helps Mizkan diversify, Unilever focus.

Japan's Mizkan Group announced on May 22 it had an agreement with Conopco Inc., a subsidiary of Unilever, to acquire the Ragú and Bertolli pasta sauce portfolio for $2.15 billion. Reports said it's Mizkan's biggest acquisition to date.

The transaction includes two production facilities – a sauce processing and packaging facility in Owensboro, Ky., and a tomato processing facility in Stockton, Calif.

Mizkan has a long track record of producing and selling sauces and condiments in Japan and internationally, but until recently those sauces have been overwhelmingly Asian. In the U.S., the company acquired Holland House cooking wines in 2005 and Border Foods Hispanic sauces in 2011. Mizkan now has 15 U.S. manufacturing plants that produce vinegars, mustards, cooking wines, wine reductions, sushi seasoning, jellies, salad dressings, Asian sauces and other liquid condiments. The company markets in retail, food ingredients and foodservices.

Unilever, on the other hand, has been selling off food businesses to focus on higher-growth health and beauty businesses. The Anglo-Dutch conglomerate's food segment -- which does not include its tea and ice cream businesses, which are sizable -- accounted for 35 percent of sales in 2008, but today total 27 percent, according to one report. Unilever sold its Wish-Bone and Western salad dressings brands to Pinnacle Foods last August for $580 million and its Bertolli and P.F. Chang’s frozen meals businesses to ConAgra in 2012 for $265 million.

The Ragú and Bertolli brand portfolio is the single largest branded pasta sauce producer and distributor in the U.S., the companies said. Ragú is the No. 1 brand across all key consumer metrics, with strong brand appeal and recognition, a diversified product range and broad distribution channels. Bertolli has the second largest market share in the premium price tier.

The North American pasta sauce market is a large and attractive category valued at approximately US$2.3 billion, the companies said. The segment has stable volume and value over time, as well as diversified product portfolio across multiple subcategories.

“This transaction represents an important milestone in our global expansion strategy," said Kazuhide Nakano, chairman and CEOof Mizkan Holdings Co. Ltd. "We are confident this transaction allows us to further achieve our objectives of diversification and expansion of our international footprint. Mizkan is strongly committed to the long-term growth of Ragú and Bertolli, and we will work to help ensure that both brands continue to grow and prosper. We believe this acquisition will create more opportunities for our company and our workforce, including Ragú and Bertolli’s talented employees, and create significant value for our global stakeholders.”

The transaction is expected to be completed by the end of June.

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