Market News

Kraft to Sell Five Canadian Plants

Kraft Foods Inc. will sell five of its Canadian grocery assets to US-based buyout firms. The financial terms of the transaction, which includes the sale of Kraft's Aylmer vegetables and Primo pasta brands to two private US equity firms, were not disclosed. Kraft Foods has said that its five Canadian production facilities had total annual sales of about $300 million last year. The transaction includes a plant at Chambly, Que., and four plants in Ontario: St. David's, Dresden, Exeter and Toronto. The sale, which is expected to close in the first quarter of 2006, will affect about 800 workers. The announcement is in line with Kraft's strategy to restructure by shedding its portfolio of slower-growing businesses and regional assets in favour of global brands such as Maxwell House, Cracker Barrel and Post cereals. The two buyers, in this case, are Sun Capital Partners Inc. and EG Capital Group LLC. EG Capital was part of a US-led consortium that paid $27.6 million for control of Laura Secord in 2004, when the chocolatier ran into financial problems. Source: Canadian Grocer E-Newsletter, Jan. 6, 2006.