Unilever to sell Wish-Bone and Western dressings brands to Pinnacle Foods

British-Dutch multinational company Unilever has entered into an agreement to sell its Wish-Bone and Western dressings brands to US-based Pinnacle Foods in an all-cash deal of $580m.

The deal, which is part of Unilever’s strategy to cut down some of its food assets and focus more on personal care products, follows the sale of its Skippy peanut-butter business to Hormel Foods earlier this year for $700m.

The transaction includes a wide range of liquid and dry-mix salad dressing flavours under the Wish-Bone and Western brand names, which have combined annual sales of $190m.

It does not include Unilever’s facility in Independence, Missouri, which currently manufactures Wish-Bone and Western brands; however, the factory will continue to manufacture for Pinnacle Foods under a third-party agreement.

Unilever North America president Kees Kruythoff said that Wish-Bone is an iconic brand and the number-one Italian dressings brand in the US.

"We believe that the potential of both the Wish-Bone and Western brands can now be more fully realised with Pinnacle Foods," Kruythoff added.

"As we continue to shape our portfolio to deliver sustainable growth for Unilever, this change will give us the focus to drive growth behind our core foods portfolio."

The transaction, which is subject to customary closing conditions, is expected to be completed in late Q3 or early Q4 2013.

Commenting on the deal, Pinnacle Foods CEO Bob Gamgort said that the acquisition of Wish-Bone is a perfect fit with the company’s strategy of ‘Reinvigorating Iconic Brands’.

"In addition to enabling significant cost synergies and tax benefits, the transaction enhances our ability to offer consumers meal solutions and recipe ideas across our broad portfolio of brands," Gamgort added.

Pinnacle Foods plans to finance the acquisition with cash on hand and new debt and expects to realise about $125m in tax benefits.

The company also plans to invest $40m to $50m to consolidate production into its existing facility and leverage its supply chain.

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Image: The proposed sale of the Wish-Bone and Western dressings brands will help Unilever to re-position itself as a personal care company. Photo courtesy of Unilever.