French’s Food will be sold after Reckitt’s strategic review of its business, in a bid to free up funds for its acquisition of baby food manufacturer Mead Johnson Nutrition.
Reckitt Benckiser ceo Rakesh Kapoor said: “Our French’s Food business is a true reflection of Reckitt Benckiser’s strengths – a portfolio of great brands driven through a culture of innovation by passionate people to deliver consistent outperformance.
“We are pleased to be selling to owners who can provide the necessary resources, market expertise and global platform, whilst being a good home for our people. French’s Food is well positioned to continue on its successful growth trajectory under the food-focused ownership of McCormick.”
French’s new owner, McCormick, will acquire the business after it failed to takeover Premier Foods last year. McCormick and Premier Foods couldn’t agree on a sale price at the time.
The spice firm will acquire all of the French’s Food brands, including French’s mustard, Frank’s RedHot sauce and Cattlemen’s barbecue sauce. Reckitt said its focus on creating high quality products with simple ingredients made French’s Food a strong match for McCormick.
McCormick president and ceo Lawrence Kurzius said: “The acquisition of Reckitt Benckiser Foods strengthens McCormick’s flavour leadership with the addition of the iconic French’s and Frank’s RedHot brands to our portfolio, which will become our number two and number three brands, respectively.
“RB Foods’s track record of creating market-leading products and its dedicated state-of-the-art manufacturing facility are a strong complementary fit that we expect will strengthen McCormick’s business opportunities as we expand our presence in condiments; a core category for the company in the US and internationally.”
The deal is subject to customary purchase price adjustments, and regulatory approval Reckitt said. It was expected to be completed by the end of October.
Reducing its debt
Reckitt will sell French’s after it completed a deal for Mead Johnson Nutrition in June. Money gained from selling French’s would go to reducing its debt following the Mead Johnson acquisition, it said.
Kapoor said: “Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming Reckitt Benckiser into a global leader in consumer health and hygiene, ensuring we continue to deliver for shareholders and give people innovative solutions for healthier lives and happier homes.”
Meanwhile, in June McCormick withdrew its offer for Premier Foods after three separate bids were rejected. Premier Foods shares plunged by up to 30% following McCormick’s withdrawal, but have since regained value.
French’s Food sale – at a glance
- Reckitt Benckiser to sell business to McCormick
- £3.2bn ($4.2bn) deal
- Reckitt to use money to reduce debt after Mead Johnson Nutrition acquisition
- McCormick failed to acquire Premier Foods last year