Premier Foods has agreed to sell its canned foods business to Princes, with brands including Crosse & Blackwell and Fray Bentos changing hands for £182m.
Sites at Long Sutton and Wisbech will switch to Princes in the latest move by Premier to cut its billion-pound debt. More than 1,000 staff will move as part of the deal.
Branston baked beas and Batchelors canned soups made at the two sites will stay under Premier’s ownership but be made under license by Princes.
The sale will complete in late March, subject to the approval of Premier’s shareholders and its lending banks. The cash will be used to pay down Premier’s debt, which stood at almost £1.4bn in July 2010.
News of the deal first emerged last November, when a price of up to £250m was touted by analysts.
“This proposed acquisition is an excellent strategic fit for our group and would enable us to further grow our business in the UK and continental Europe by offering our customers a broader range of ambient food products and brands,” said managing director Ken Critchley.
Last month Premier sold off its meat-free business, comprising the Quorn and Cauldron brands, to Exponent Private Equity.
Premier chief executive Robert Schofield said the canned grocery business had “not been an area of focus” for the company in recent times.
“Selling the business simplifies our operations and allows us to concentrate our efforts on our current portfolio of great British brands,” he said.
“Combined with the proposed disposal of our meat-free business, we will have delivered total gross proceeds of £387m, significantly accelerating the delivery of our financial strategy [to cut debt].”
Quorn will realise its potential under new owners, say experts (29 January 2011)
Focus On Meat Free (29 January 2011)
Top Products Survey 2010: Canned goods (18 December 2010)
Princes ponders bid for Premier canning arm (17 November 2010)