(qlmbusinessnews.com via telegraph.co.uk – – Wed, 19 July 2017) London, Uk – –
US spices and herbs business McCormick has snapped up Reckitt Benckiser’s food business for more than £3bn.
McCormick has beaten off rival bidders for the business, which owns brands such as French’s mustard and Frank’s RedHot sauce.
The Baltimore-based company has been trying to expand globally and last year launched a failed takeover bid for Premier Foods.
It said the move for Reckitt’s food business, first revealed by the Telegraph earlier this year, would catapult it to the top of the US condiments market, up from 10th position.
Lawrence E Kurzius, the company’s chief executive, said French’s and Frank’s RedHot would now become McCormick’s second and third biggest brands respectively.
“RB Foods’ focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as we continue to capitalise on the growing consumer interest in healthy, flavourful eating,” he said.
Reckitt said the £3.2bn valuation “reflects the quality of this highly profitable, growth business” and added that it intended to use the proceeds from the sale to reduce debt.
“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,” said Reckitt boss Rakesh Kapoor.
The decision to offload the food unit comes months after Reckitt bought US baby formula maker Mead Johnson for £14.2bn.
“Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene,” said Mr Kapoor.
By Hannah Boland Sam Dean