Retailers, consumers and prices
Check Out Line: Ralcorp, Corn Products, Heinz go shopping
Check out the deals by Ralcorp Holdings, Corn Products International and Heinz.
Ralcorp, which sells a variety of products, including Post-branded cereals, corn snack products, syrups and salad dressings, said it would buy private-label dry pasta maker American Italian Pasta Co for $1.2 billion. That deal is expected to close by the end of September.
“This transaction strengthens our position as a diversified provider of private label and branded food products,” Ralcorp co-Chief Executive and President Kevin Hunt said in a statement.
It also said it bought privately held North American Baking Ltd and JT Bakeries Inc for an undisclosed amount to expand its portfolio of gourmet crackers. Ralcorp expects the deals to add to earnings during the rest of the current fiscal year.
However, Ralcorp added that it expects to earn about $1.00 a share in the third quarter, below the $1.29 analysts were expecting. It cited heavier competition in the cereal category. The company does not plan to provide earnings outlook in the future except under “unique circumstances.”
Corn Products, a corn refining and ingredient firm, will buy a food ingredient and specialty starches business from Dutch paints firm AkzoNobel for $1.3 billion in cash. An AkzoNobel spokesman said Corn Products also would assume about $100 million in pension and employee benefit liabilities.
Corn Products, based in Westchester, Illinois, said adding New Jersey-based National Starch will create a company with nearly $5 billion in annual revenue. The deal is expected to close at the end of the third quarter.
“This acquisition gives us access to new markets such as Europe, and improves our scale and capabilities in many of our existing global locations,” Corn Products CEO Ilene Gordon said in a statement.
Corn Products said the deal, which is expected to add to earnings by the end of 2011, is expected to generate cost savings of at least $50 million.
Meanwhile, Heinz said it has signed a deal to buy Foodstar, which makes soy sauces and fermented bean curd in China, from private equity firm Transpac Industrial Holdings Ltd for $165 million when the deal closes plus an undisclosed potential performance-based payment in 2014.
Heinz said the deal would increase its sales in China to about $300 million and allow it to enter the nation’s fast-growing $2 billion retail soy sauce market.
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