A major deal combining the frozen food operations of Heinz and Unilever could be sown up in the next few months, a key industry source has claimed.
The first round of bidding for Heinz’s up-for-sale frozen business is coming to a head while Unilever is tipped to announce plans to sell its Birds Eye brand in the next few weeks. A source close to the Heinz deal said that some of the same bidders had expressed an interest in taking on Birds Eye and uniting the brands under one kingsize frozen business.
The increasingly likely scenario of a super-deal being put together by an adventurous private equity firm, combining Birds Eye, Heinz and Findus’ European operations was first suggested by The Grocer (September 24, p37).
Premier Foods has been linked with a move for the Heinz operation, but many analysts believe that it will be snapped up by a private equity firm. The source said that a private equity company was the most likely candidate, especially if a super-deal was to go through with the inclusion of the Findus assets in Europe, currently owned by EQT, which are also up for sale.
Findus in the UK is a privately owned company following a buyout led by a former manager last April and is not up for sale.
The source claimed: “Private equity companies would be interested in Heinz and Findus in their own right but it is Unilever that is making them salivate. The idea of three great brands under one umbrella is extremely mouthwatering.”
The Findus sale is in the second round of negotiations and a deal is expected this month or next, while the Heinz deal should be concluded by March, said the source. He said he was confident that Unilever would sell, despite an increase in marketing spend on Birds Eye and improved sales last year.
The Grocer Top Products Survey (December 17, p95) revealed that sales of Birds Eye cod fillet fish fingers grew 3.1% to £43.7m last year, while sales of its Simply Fish cod fillets climbed 25% to £29.4m.
The Birds Eye sale could net Unilever £1.4bn while Heinz’s business and Findus are likely to set a bidder back by £500m each. Private equity companies previously linked with the deal include PAI Partners, Lion Capital, Capvest, Doughty Hanson and Cinven.
Ronan Hegarty