Mondelez International is said to be selling the rights to its Philadelphia cream cheese brand as part of a broader $3-billion grocery brand divestiture, reports Scotland's The Drum Feb. 14. KraftHeinz has an option to buy back the European rights to the cream cheese brand, though there is reportedly a long list of other suitors should it chose not to.
The snacks business has informed bidders that the brand will go up for sale next month, according to the reports. At that time, the company will begin listening to offers, with American banks JP Morgan and Goldman Sachs being brought in to assist with the sale. Mondelēz was first rumored to be looking to offload its cheese and groceries business in Europe last year, with French dairy business Lactalis and private equity firms such as Advent International and Carlyle as most likely now to bid for Philadelphia. The division incorporating the Philadelphia brand has performed well for Mondelez, but is deemed surplus to requirements.
Kraft Foods spun off its North American grocery business, Kraft Foods Group, in 2012, and consequently changed its name to Mondelez International. The recently merged Kraft-Heinz owns the American rights to Philadelphia Cream Cheese and has the option to buy back the European rights. Kraft held onto the rights to most of its American and Canadian cheese and grocery brands, including Philadelphia in the U.S., while Mondelēz assumed the rights to Philadelphia across mainland Europe and the U.K.
Rumors that Mondelez would sell its grocery and cheese business first surfaced last September, just months after it turned it into a standalone business. At the time, the company’s CEO Irene Rosenfield said there were no immediate plans to sell off the unit, though Mondelez has come under much pressure to generate cash following investor criticisms and nine straight quarters of slow growth.