Lactalis Group, a France-based dairy group with extensive North American operations, revealed an agreement to pay $3.2 billion for Kraft Heinz’s natural, grated, cultured and specialty cheese businesses in the U.S., grated cheese business in Canada and entire international cheese business.
Lactalis will acquire such brands as Cracker Barrel, Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s and, outside the U.S. and Canada only, Cheez Whiz. Lactalis also gets a perpetual license for the Kraft brand in natural, grated and international cheeses and Velveeta in natural and international cheeses.
Kraft Heinz will retain the Philadelphia Cream Cheese, Kraft Singles, Velveeta Processed Cheese and Cheez Whiz Processed Cheese businesses in the U.S. and Canada, the Kraft, Velveeta and Cracker Barrel Mac & Cheese businesses worldwide and the Kraft Sauces business worldwide.
The businesses being sold had sales of approximately $1.8 billion in the past 12 months.
Kraft Heinz executives called it "portfolio management at work.” The divestiture "will help guide resource allocation and investment decisions. Kraft Heinz will focus on growth areas and take strategic action where appropriate."
Lactalis, with U.S. operations based in Buffalo, N.Y., also will acquire three Kraft Heinz production facilities located in Tulare, Calif., Walton, N.Y., and Wausau, Wis., plus a distribution center in Weyauwega, Wis.
Approximately 750 Kraft Heinz employees will be joining Lactalis, and the company expects to add additional American jobs to support this business following the closing of the transaction, which is expected in the first half of 2021.
Lactalis owns such brands as Président, Galbani, Parmalat, Karoun, Rondele, Black Diamond, Stonyfield Organic and Siggi’s. Those last two were American yogurt companies acquired late 2017 and early 2018, respectively.
Lactalis already has eight U.S. plants in New York, Vermont, New Hampshire, Wisconsin, Idaho, Arizona and California, and 2,600 employees across the country and has been present in the U.S. for 40 years. It has a presence in 51 countries.
