Kraft Foods has announced that it has agreed to sell the assets of its North American pizza business to Nestle for a total consideration of $3.7 billion. The company estimates that its pizza business generated 2009 net revenues of $1.6 billion under U.S. Generally Accepted Accounting Principles.
The sale, which is subject to customary conditions including regulatory clearances, includes the DiGiorno, Tombstone and Jack's brands in the United States; the Delissio brand in Canada; and the California Pizza Kitchen trademark license. It also includes two Wisconsin manufacturing facilities (Medford and Little Chute) and the right to take on the leases for the pizza depots and delivery trucks. Kraft Foods anticipates that approximately 3,400 employees will transfer with the business to Nestle. The transaction is expected to close in 2010.
"Selling this business now not only delivers an attractive return for our shareholders, but enables us to better focus our resources on priority global brands and categories," said Irene Rosenfeld, Kraft chairman and CEO. "Nestle is well-positioned to continue building these powerhouse pizza brands, given its strength in frozen foods."
Rosenfeld continued, "We are grateful for the hard work and dedication of our talented employees who delivered exceptionally strong results in 2009 and have helped us build this into the number one frozen pizza business in North America. We're confident the business will continue to thrive under Nestle's ownership. We wish them much continued success."
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