US food giant Kraft Heinz is selling its 50.1% stake in its joint venture, Heinz Foods SA, to Bokomo cereals and Sasko bread maker Pioneer Foods for an undisclosed amount. Pioneer Foods has announced it will be acquiring full ownership of Heinz Foods South Africa, the joint venture (JV) it had with the global food maker.
The terms of the deal were not disclosed, but is expected to close in the first quarter of 2018 if regulators approve, at which time Heinz Foods SA will become a wholly owned subsidiary of Pioneer Foods.
According to Tertius Carstens, Pioneer Foods’ CEO, the company will continue to work with Kraft Heinz.
It has entered into a two-year agreement to continue manufacturing Heinz tomato ketchup and distributing HP & Kea Perrins and other Kraft products in South Africa.
“By acquiring full ownership of Heinz Foods South Africa, we look forward to the further growth and development of the portfolio that includes a range of number one or two brands in their respective categories,” said Pioneer Foods CEO Tertius Carstens.
Kraft Heinz’s Middle East and Africa MD, Felipe Guimaraes, said Pioneer had the “existing scale and platform in SA to grow the business further.”
Pioneer – which posted a 2% increase in its revenue to R10.1m ($0.7m) for the six months to March 31, 2017 – acquired a 49% stake in the cereal brand Weetabix, which included a partnership with Weetabix UK, in 2016.
Bokomo Foods, another wholly owned division of Pioneer, is the largest breakfast cereal company in South Africa.
Cape Town-based Pioneer also sells a number of well-known brands including Sasko bread, Spekko rice, White Star maize meal, Safari dried fruit, and Mama’s pies and pastries, among others.
Kraft Heinz was formed in 2015 from the merger of Pittsburgh-based H.J. Heinz and Illinois-based Kraft Foods. The company reported a 0.7% increase in its net sales to $6.3bn in the third quarter of 2017, versus the year-ago period.
Source: Bakery and Snacks