Japan’s Mizkan Group has signed a deal with Conopco, the Unilever subsidiary, under which it will acquire the Ragu and Bertolli pasta sauce brands for JPY215bn (US$2.15bn).
It seems that Mizkan, which is best known for manufacturing liquid condiments, is ramping up its focus on its branded business in North America by acquiring two of the biggest names in Italian sauces.
The company said Mizkan is now looking to develop a more balanced global operation by diversifying away from a focus on the Japanese market.
"This transaction represents an important milestone in our global expansion strategy," said Kazuhide Nakano, chief executive of Mizkan Holdings.
“We are confident that it allows us to further achieve our objectives of diversification and expansion of our international footprint.
“We believe this acquisition will create more opportunities for our company and our workforce, including Ragu and Bertolli's employees, and create significant value for our global stakeholders."
The transaction includes two production facilities: a sauce processing and packaging facility in Owensboro, Kentucky and a tomato processing facility in Stockton, California.
Together, Ragu and Bertolli form the single largest branded pasta sauce producer and distributor in the United States. Ragu is the number one brand across all key consumer metrics, with strong brand appeal and recognition, a diversified product range and broad distribution channels. Bertolli has the second largest market share in the premium price tier.
The North American pasta sauce market is valued at around US$2.3bn, and has held stable volume and value over time.
However, the deal does not give Mizkan sales rights to the Ragu and Bertolli brands in Europe.
The acquisition of the Ragu and Bertolli brand portfolio follows Mizkan's recent acquisitions of Holland House and Border Foods in the US, signalling the company’s plans for global expansion of its retail, food ingredients and food services businesses.
In America, Mizkan has 15 manufacturing plants producing vinegars, mustards, cooking wines, wine reductions, sushi seasoning, jellies, salad dressings, Asian sauces and other liquid condiments.
The acquisition will be paid for with the proceeds of a new financing facility. It is expected to go ahead by the end of June, pending approvals and due diligence.
Still a private company, Mizkan was founded 210 years ago and now has operating facilities in Japan, China, the UK, America, Singapore, Hong Kong and Taiwan.