Parmalat Group to acquire Kraft Heinz Canada natural cheese for C$1.62bn
Parmalat, which is controlled by France's Lactalis, announced that it will add several new brands to its portfolio with the C$1.62bn (US$1.23bn) acquisition of the natural cheese division of Kraft Heinz Canada following a ‘competitive bidding process’.
The move highlights a desire for Parmalat Canada to invest further in its local dairy sector and a ‘vote of confidence’ for its future. It also will allow the company to utilize more of the milk ingredients they already produce to reduce waste and increase self-sufficiency.
“If approved, the transaction will both secure and grow cheese production in Canada and make Parmalat Canada a more competitive company which in turn will help protect jobs and support dairy farm incomes,” Parmalat said.
Expansion in Québec
It revealed the strategic benefits of the acquisition, including its plans to leverage the popularity of the Cracker Barrel brand, particularly in the branded segment of natural cheese. The new companies will also help Parmalat increase its representation in areas of Canada like Québec where its reach is limited. Parmalat currently has nearly 3,000 employees and 16 dairy processing plants in Canada.
“The transaction, coupled with further planned investment, is expected to produce synergies with the existing Parmalat Canada manufacturing and distribution network which in turn could lower costs, will protect jobs and support dairy farm incomes,” Parmalat said.
In the deal Parmalat will also absorb a processing plant in Ingleside, Ontario, with nearly 400 employees. It said it will maintain each brand’s distinct and unique consumer appeal.
Mark Taylor, Parmalat CEO and president, said "Today's announcement speaks volumes about our drive to support dairy farmers, help the local economy and continue to build on our family tradition of cheese making."
"We are excited to work closely with the community and our stakeholders to ensure we can grow sustainably and help Canada's natural cheese business thrive. Parmalat's brands in Canada date back as far as 1881 (Balderson). This deep-rooted heritage in Canada makes the proposed transaction a logical step for us as we seek to make an even more significant economic and social contribution in Canada."