Heinz, the US food producer, has said it will take an 80 per cent stake in a Brazilian food company that will double its sales in Latin America.
Heinz will become a majority stakeholder in Coniexpress SA Industrias Alimenticias, which makes the Quero brand of tomato-based sauces, tomato paste, ketchup, condiments and vegetables.
The terms of the cash deal were not made public. Heinz said on Thursday that Coniexpress has annual sales of $325m and Valor Economico, a Brazilian newspaper, reported that the deal’s value was between R$1bn-R$1.2bn, or $725m.
“This transaction is another significant step in our emerging markets strategy,” said William Johnson, Heinz’s chief executive. “The Quero brand is a natural fit with the global capabilities of Heinz and gives us a scalable growth platform in Brazil, a key emerging market with nearly 200 million consumers and a growing economy.”
Officials at Coniexpress declined to comment on the announcement.
Heinz said that next year emerging markets would account for 20 per cent of its total sales, up from 16 per cent. Last November it acquired Foodstar, a leading soy sauce manufacturer in China, boosting its foothold in Asia.
The US group lauded Quero’s presence in shops and independent stores in Brazil and said it would use its experience in supermarkets and commercial outlets to broaden its exposure.
Mr Johnson said that Heinz would use the same “buy and build” strategy that it has used in other emerging markets and that it intends to use the Quero brand as a starting point to expand sales of other Heinz branded products across Brazil. He said the country was attractive because of the stability of its economic and political systems.
“Even with the recent presidential change, Brazil is a market that we feel very confident and comfortable going into,” he said.
Heinz was advised on the deal by JPMorgan. Its shares rose by 1.39 per cent to $49.66 in New York.
The announcement came as Heinz reported a 20 per cent rise in its third-quarter profits to $274m, or 84 cents a share. Sales rose by 1.5 per cent to $2.72bn.
Heinz has been pushing aggressively in emerging markets. In the third quarter it introduced its first line of canned vegetables in Russia, introduced a new variety of soya sauce in Indonesia and in India began selling new nutritional beverages.
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