Consumer products giant Unilever Plc ( UL ) has been focusing on its core portfolio to deliver sustainable growth. Unilever's core businesses comprise detergents, foods, toiletries and specialty chemicals. In order to do so, it recently agreed to sell its Ragu and Bertolli pasta sauces brands, which generate sales of $600 million annually.
Per the deal, Unilever will sell the ownership of its Ragu and Bertolli brand sauces to Japan's Mizkan Group for $2.15 billion. The deal will be a strategic fit for Mizkan Group, a privately held maker of condiments and sauces, as it expects to expand internationally.
The divestiture will involve the sale of two factories: a sauce processing and packaging facility in Owensboro, KY and a tomato processing plant in Stockton, CA. The deal is expected to be complete in June.
Of late, Unilever has been divesting its non-core businesses to focus its resources on the core food portfolio. In February, the company sold its meat snacks business to Berlin-based Jack Link's Meat Snacks for an undisclosed amount.
Prior to that, in January, Unilever sold its Royal pasta brand to RFM Corporation, one of the biggest diversified food and beverage companies in the Philippines. In Dec 2013, Unilever sold its Soft & Beautiful, TCB and Pro-Line Comb-Thru brands in the hair care category to an international hair care company - Strength of Nature for an undisclosed amount. The sale however excludes TCB's business in Africa.
In early Oct 2013, Unilever sold its Wish-Bone salad dressing business to food company Pinnacle Foods Inc. ( PF ) for $575 million, while in August, ConAgra Foods Inc. ( CAG ) bought its Bertolli and P.F. Chang's frozen meals brands for $265 million. In Jan 2013, the company sold its Skippy peanut butter business to Austin, MN-based producer of branded food and meat, Hormel Foods Corp. ( HRL ) for $700 million in cash.
Unilever currently holds a Zacks Rank #2 (Buy).