PITTSBURGH, Pa., and ST. LOUIS, Mo., Feb. 28, 2000 /PRNewswire/ --
H.J. Heinz Company (NYSE: HNZ) and Milnot Holding Corporation have signed an
agreement for Heinz to acquire Milnot, a leading producer of branded and
private-label food products based in St. Louis. Milnot's largest subsidiary
is Beech-Nut Nutrition Corporation, maker of the popular Beech-Nut brand of
prepared baby foods.
Together, the two companies would represent approximately 24% of the U.S.
prepared baby food category, compared to Gerber, which has nearly 73%.
Currently, Heinz and Beech-Nut are regional players with minimal overlap in
distribution on grocery shelves.
A Winning Proposition for Customers and Consumers
Heinz President and Chief Executive Officer William R. Johnson said that
the combination of Heinz's and Beech-Nut's baby food operations will be "a
winning proposition for consumers and for retail customers."
"Although we will still be a distant second to Gerber, a combination of
Heinz and Beech-Nut will provide the critical mass to make the U.S. baby food
market more competitive, innovative and dynamic," Mr. Johnson said. "We will
be able to offer a value-priced premium baby food that combines the respective
strengths of Heinz and Beech-Nut in a national brand."
Joe Jimenez, President and CEO of Heinz North America, explained: "This
acquisition will give Heinz's North American infant feeding business added
scale and national presence from which to drive innovation and category
growth. We will be able to offer consumers more innovative products and
packaging. And we can provide our retail customers improved service and more
exciting merchandising opportunities by leveraging the strength of a combined
customer-focused sales and distribution system."
Mr. Johnson noted that a stronger Heinz/Beech-Nut combined baby food
business will benefit the entire category in the U.S. "We have proven in
countries such as the U.K. and Italy, where we have critical mass, that Heinz
can grow the baby food category," he said. "Through product innovation,
exciting marketing and consumer education, we have generated category volume
growth in these and other global markets. Importantly, Heinz's global Infant
Foods Category process will enable us to transfer best global practices to
bring much-needed innovation to this category in the U.S."
Purchase to Include Other Businesses
In addition to Milnot's Beech-Nut baby food business, Heinz will acquire
the company's other branded and private-label businesses, including Milnot
brand evaporated and sweetened condensed canned milk and Chilli Man brand
canned chili. "Milnot's canned milk and chili products are known for their
high quality and excellent value," said Mr. Johnson. "They are solid regional
businesses, with strong prospects for long-term growth."
Scott Meader, President and CEO of Milnot Holding Corporation, called the
transaction, "the start of a new era of competition, innovation and growth" in
the U.S. baby food market. "This deal will stem the decline in the U.S.
prepared baby food category. It will create a powerful, national competitor
from two regional players, producing for the first time a credible challenger
to Gerber."
Milnot is privately held by Chicago-based Madison Dearborn Partners, Inc.,
a leading private equity firm with approximately $4 billion of assets under
management.
Terms of the agreement were not released. The transaction is subject to
the normal U.S. regulatory review.
SOURCE H.J. Heinz Company
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http://www.heinz.com
Company News On-Call:
http://www.prnewswire.com/comp/575757.html or fax,
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CONTACT:
MEDIA, Ted Smyth, SVP-Corp. & Govt. Affairs,
412-456-5780; Debbie Foster, Director-Corp. Comm., 412-456-5778;
or Jack Kennedy, GM-Strategic Comm., 412-456-5923, all of H.J.
Heinz Company; Debbie Bolding, GM-Communications, 412-237-5796,
of Heinz North America; Sal Stazzone, VP-Marketing, 314-655-2113,
of Milnot; or David Mosher, Managing Director, 312-895-1130, of
Madison Dearborn Partners, Inc. INVESTORS, Jack Runkel,
VP-Investor Relations, 412-456-6034, of Heinz
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