HJ Heinz said today said it has agreed to buy French food company Danone's HP Food unit for about $855 million in a deal that will put the popular HP and Lea & Perrins sauces under the same roof as Heinz Ketchup.
Danone said it expected to book a capital gain of more than 450 million euros ($606.9 million) in its 2005 accounts from the sale and Heinz said it expected the acquisition to be accretive in the first full fiscal year.
The transaction also gives Heinz a perpetual licence to market Amoy Asian sauces and products in Europe, the Pittsburg-based company said. The sale, which still needs regulatory approval, will mark the completion of the French group's refocusing on its three strategic businesses - fresh dairy products, beverages and biscuits, Danone said.
"The acquisition of these brands is consistent with our strategy to drive growth in our profitable and expanding core condiments and sauces category," Heinz chief executive William Johnson said in a statement. "We have identified many opportunities to expand sales of the HP, Lea & Perrins and Amoy brands," he added.