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PITTSBURGH, and UNIONDALE, N.Y., Sept. 27, 1999 /PRNewswire/ -- H. = J.=0A= Heinz Company (NYSE: HNZ - news) and The Hain Food Group, Inc. (Nasdaq: = HAIN - news) today=0A= announced an agreement to form a strategic alliance for the global = production=0A= and marketing of=0A= natural and organic foods and soy-based beverages.=0A= This=0A= nearly $100 million investment by Heinz will give it a minority stake = (19.5%=0A= or 3.5 million shares) in Hain and was based on a per-share purchase = price in=0A= excess of the $28.4375 closing price of Hain stock on Friday, September = 24,=0A= 1999.=0A= Further, Heinz will provide procurement, manufacturing and logistic=0A= expertise while Hain will provide marketing, sales and distribution = services.
The natural and organic food category represents a $20 = billion U.S.=0A= business growing at 15 to 18 percent annually.=0A= Hain is projecting more than=0A= $300 million in revenues for the current year, following revenues of=0A= $206 million in the year ended June 30, up from $104 million the prior = year.=0A= Hain is the U.S.A.'s leading natural and organic food company, with = more than=0A= 3,500 products offered under such well-known names as Health Valley = cereal,=0A= bakery and soups; Terra Chip snacks; and Westsoy, the largest soy = beverage=0A= marketer.
``This strategic alliance thrusts Heinz into the natural = and organic food=0A= segment, which is among the fastest growing in the international = food=0A= industry.=0A= Heinz is the first major U.S. food company to gain such direct=0A= access to natural food retail stores.=0A= We see attractive opportunities for us=0A= in our global markets,'' explained William R. Johnson, Heinz president = and=0A= chief executive officer.=0A= ``We will marry Heinz's great strength and scale in=0A= low-cost international procurement, manufacturing and logistics with = Hain's=0A= talent and success in the marketing, sales and distribution to = specialty food=0A= outlets.=0A= The resulting sales growth and cost synergies will benefit=0A= shareholders of both Heinz and Hain and will be accretive to the = earnings per=0A= share of both companies in the first year.''
As part of the strategic = alliance, Heinz will be represented on the=0A= expanded Hain board of directors by Joseph Jimenez, president and CEO = of Heinz=0A= North America, and Malcolm Ritchie, executive vice president of the H. = J.=0A= Heinz Company and president Heinz Europe.=0A= Heinz and Hain will exchange some=0A= technical and management personnel in collaborative research and = manufacturing=0A= programs.=0A= Additionally, Hain will acquire from Heinz the trademark and name=0A= for Earth's Best organic baby foods.
``I am happy that Hain has = forged this alliance with one of the world's=0A= foremost food companies.=0A= Hain has been marketing and distributing Earth's=0A= Best products since 1998; we have increased sales by more than 25% and = believe=0A= there is great global potential for the brand beyond infant feeding,'' = noted=0A= Irwin Simon, president and CEO of Hain.=0A= ``This alliance is a strategic fit=0A= with our expanding product line, and we have some of the strongest = names in=0A= the natural and organic food industry with great growth = opportunities=0A= internationally and domestically.''
The $20 billion U.S. market for = natural and organic foods includes=0A= $12 billion in sales in specialty stores (natural and organic food = shops) and=0A= $8 billion through traditional supermarkets.=0A= Hain has number-one or=0A= number-two market shares in 11 of the top 15 natural and organic = food=0A= categories.
``With growing consumer demand for natural and functional = foods in=0A= North America, Heinz and Hain will form a powerful global team.=0A= This will=0A= enable Heinz to leverage the Hain sales and distribution network to = drive=0A= functional food sales in North America,'' Mr. Jimenez said.
Mr. Simon = added:=0A= ``Traditional supermarkets, drug stores and mass=0A= merchandisers are rapidly expanding their natural and organic = product=0A= offerings and, by joining with Heinz, we will grow and, at the same = time,=0A= reach economies of scale in production and improve our supply chain.=0A= And,=0A= with the resources and global capabilities of Heinz, Hain will be = positioned=0A= for the first time to satisfy the growing international demand for = healthy=0A= foods and snacks.''
``We expect to greatly extend our European sales = in this segment as a=0A= result of the Hain partnership, which gives us access to the rapidly = growing=0A= natural and organic food business, in addition to other items in the = cereal,=0A= snack, condiment and baked goods categories,'' explained Mr. = Ritchie.
The alliance with Hain complements Heinz's worldwide = portfolio of brands=0A= that meet special nutritional needs.=0A= The $100 million Heinz range includes an=0A= array of gluten-free and other special diet products made by Heinz = Italy under=0A= the brand names Bi-Aglut, Aproten and Dieterba.=0A= Additionally, it offers=0A= Complan and Glucon D nutritional drink mixes, sold in India and parts = of=0A= Europe and South Africa.=0A= ``We will expand sales of these foods in the=0A= United States through Hain's outstanding marketing and distribution = network,''=0A= Mr. Simon explained.
``The goal of our strategic alliance is to = heighten consumer awareness of=0A= the benefits of natural and organic food and make Heinz a global leader = in=0A= this profitable segment of the industry,'' Mr. Jimenez said.=0A= ``Heinz has been=0A= known as the pure food company since its founding.=0A= This partnership with Hain=0A= positions Heinz in the forefront of one of the leading consumer trends = in the=0A= food industry.''
Heinz and Hain have worked together on other = products for the past=0A= two years.=0A= Hain manufactures, markets and sells certain Weight Watchers brand=0A= dry and refrigerated products under a 1997 licensing agreement with = Heinz.=0A= The line includes salad dressings, canned soups, sauces, cookies and=0A= mayonnaise, among other items.=0A= Also in 1997, Hain acquired from Heinz the=0A= Alba Foods line of regular and non-fat dry milk products, cocoa mixes = and=0A= dairy shakes.
This transaction is subject to customary regulatory = approval.
The above contains certain forward-looking statements which = are based on=0A= management's current views and assumptions regarding future events = and=0A= financial performance.=0A= For Heinz, reference should be made to the section=0A= ``Forward-Looking Statements'' in Item 1 of H. J. Heinz Company's = Annual Report=0A= on Form 10-K for the fiscal year ended April 28, 1999 for a description = of the=0A= important factors that could cause actual results to differ materially = from=0A= those discussed above.=0A= For Hain, certain of the statements in this press=0A= release are forward looking in nature and, accordingly, are subject to = risks=0A= and uncertainties.=0A= The actual results may differ materially from those=0A= described or contemplated.
ABOUT HEINZ:=0A= With sales over $9 billion, H. J. Heinz Company is one of=0A= the world's leading food processors and purveyors of nutritional = services.=0A= Its 50 affiliates operate in some 200 countries, offering more than=0A= 5,700 varieties.=0A= Among the company's famous brands are Heinz, StarKist,=0A= Ore-Ida, 9-Lives, Weight Watchers, Wattie's, Plasmon, Farley's, Smart = Ones,=0A= The Budget Gourmet, Rosetto, Bagel Bites, John West, Petit Navire, = Skippy,=0A= Kibbles 'n Bits, Pounce, Wagwells, Nature's Recipe, Orlando, Olivine = and=0A= Pudliszki.=0A= Information on Heinz is available at http://www.heinz.com.
ABOUT = HAIN:=0A= The Hain Food Group, headquartered in Uniondale, NY, is a=0A= natural, specialty and snack food company.=0A= The Company is a leader in many of=0A= the top 15 natural food categories, with such well-known natural food = brands=0A= as Hain Pure Foods®, Westbrae®=0A= Natural, Westsoy®, Arrowhead Mills®,=0A= Health Valley®, Breadshop's®, Casbah®, Garden of = Eatin®, Terra=0A= Chips®, DeBoles®, Earth's Best®, and Nile Spice.=0A= The company's=0A= principal specialty and snack food product lines include Hollywood® = cooking=0A= oils, Estee® sugar-free products, Weight Watchers® dry and = refrigerated=0A= products, Kineret® kosher foods, Boston Better Snacks®, Harry's = Premium=0A= Snacks and Alba Foods®.=0A= Hain's Internet web site is=0A= http://www.thehainfoodgroup.com= .=0A= =0A= =0A=
H. J. Heinz Company
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