Kerry Group has announced that it has reached agreement to acquire the business-to-business (B2B) powdered cheese division and related assets of the Kraft Heinz Company for consideration of $107.5 million (€107.4 million at the current exchange rate).
Kraft Heinz’s powdered cheese business currently has 62 employees and a manufacturing facility in Albany, Minnesota in the US.
The acquisition is expected to close in the coming months. Final consideration is subject to business completion adjustments.
Announcing the deal yesterday (Tuesday, August 30), Kerry said that the acquisition will enhance the business’ scale, manufacturing capability, and customer base in the snack category.
In a statement yesterday, Kraft Heinz said that it had entered into a “definitive agreement” to sell its powdered cheese division to Kerry, adding that the transaction is expected to close in this half of 2022, subject to regulatory review and approval.
Kraft Heinz said that its Minnesota-based plant is expected to continue operating as normal under Kerry’s ownership, with all current employees there expected to remain on.
Kraft Heinz said that the divestiture of its powdered chees business reflects the business’ “ongoing and active portfolio optimisation”.
Kerry milk price
Earlier this month, Kerry announced an increased milk price for supplies in the month of July, raising its price by 2.5c/L, bringing the price up to 56c/L at 3.3% protein and 3.6% butterfat, inclusive of VAT.
The processor also announced details of additional payments “as part of its contractual commitment to pay the leading milk price”.
“As part of our contractual commitment to pay the leading milk price, on a like-for-like basis, milk suppliers will receive an additional payment of 0.63c/L, inclusive of VAT, at Kerry average solids on all qualifying milk supplied in June, year-to-date,” the business said.
It also confirmed: “Kerry Group will also make an ex-gratia payment equivalent to 0.63c/L, inclusive of VAT, at Kerry average solids on milk volume under fixed-price contracts for the same period.”