Lactalis Buys Part of Kraft Heinz’s US Cheese Business

The French dairy giant Lactalis buys part of Kraft Heinz‘s US cheese business. Lactalis thus overtakes Nestle on the ranking of the world’s top-selling milk processors.

The deal includes the US natural cheese business, the grated cheese business in Canada and the entire international cheese business outside of these two markets with cheese brands such as Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s and Cheez Whiz. Kraft Heinz will keep brands like Philadelphia, Kraft Singles, Velveeta and Kraft Sauces, reports food newspaper. The two companies quote $ 3.2 billion as the purchase price. The planned transaction is expected to be completed in the first half of 2021.

With the sale, Kraft Heinz is streamlining its portfolio and concentrating on brands that have “stronger brand value and greater growth prospects,” said Kraft-Heinz CEO Miguel Patricio in a statement from Kraft.

With the deal, Lactalis is also taking over three production facilities in the USA: in Tulare, California, in Walton (New York) and Wausau (Wisconsin) as well as a distribution center in Weyauwega (Wisconsin). Around 750 employees switch from Kraft Heinz to Lactalis. With the takeover, Lactalis is strengthening its presence in the USA, but also wants to market the acquired brands more internationally.

Lactalis overtakes Nestle
According to Kraft Heinz, the cheese business sold contributed around 1.8 billion US dollars to Kraft Heinz’s net sales in the past fiscal year (ending June). With the acquisition, Lactalis is overtaking Nestle as traditionally the largest milk processor in the world, as lz.net writes. In a recently published ranking of the largest milk processors, Nestle was still in first place with a turnover of 22.1 billion US dollars, closely followed by Lactalis with 21.0 billion US dollars.

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