Princes swallows Fray Bentos in £182m deal

PRINCES Foods, the Liverpool-based food manufacturer is buying Premier Foods’ canned business for £182m.

The deal will add £334m to Princes’ sales and bring leading food brands Fray Bentos, Crosse & Blackwell and Farrow’s.

The unit, which is being sold by listed Premier, is mostly based in East Anglia. A stock market statement said the division was set to contribute £32m in ebitda for 2010.

Under the terms of the agreement, which is subject to Premier Foods’ shareholder and regulatory approval, Premier Foods’ sites at Long Sutton and Wisbech would transfer to Princes. Together the sites employ more than1,000 people.

A number of Premier Foods’ other brands, including Branston and Batchelors would remain under Premier Foods’ ownership but be licensed to Princes on a long-term arrangement for the production of specific products at Long Sutton and Wisbech.

These include Branston baked beans and Batchelors canned soups. The proposed acquisition expands Princes’ branded portfolio in the canned foods sector and increases the company’s range of customer own label and branded products.

Following completion of the deal, Princes will have annual revenues of nearly  £1.5bn, 4,500 employees, 13 food and drink production sites and a portfolio of leading brands.

The North West company, which is owned by Japanese conglomerate Mitsubishi Corporation, already owns the Napolina Italian food range and Crisp n Dry cooking oil.

Ken Critchley, managing director of Princes, said: “This proposed acquisition is an excellent strategic fit for our group and would enable us to further grow our business in the UK and continental Europe by offering our customers a broader range of ambient food products and brands.”

Robert Schofield, chief executive of Premier Foods, added: “As a predominantly non-branded business, it has not been an area of focus for us.

“Selling the business simplifies our operations and allows us to concentrate our efforts on our current portfolio of great British brands.  Combined with the proposed disposal of our meat-free business, we will have delivered total gross proceeds of £387m, significantly accelerating the delivery of our financial strategy.”