By Ian Neubauer
Food giant HJ Heinz announced on Monday (October 6) it has made an offer to acquire Australian fruit juice and canned food maker Golden Circle for $288 million, or $1.65 per share.
The acquisition falls in line with Heinz’s new focus on the lucrative health and wellness sector. It will see Heinz leverage its global marketing and innovation capabilities with Golden Circle’s brand strength and respected profile in the health foods sector.
“Heinz is a leading global player in the food industry. It is considered an innovator with considerable marketing know-how,” said Golden Circle CEO, Craig Mills. “The acquisition provides the opportunity for a complementary product range offering a wide variety of everyday consumer food and beverages under iconic brands.”
Heinz Managing Director, Peter Widdows, said Heinz would maintain contacts between Golden Circle and its growers, adding that they would benefit from increases in volume demand.
“We are acutely aware of Golden Circle’s origins and the importance of Golden Circle to the farming community,” he said. “Our desire is to maintain contracts between growers and Golden Circle, which would benefit from potential increases in volume over time as the combined sales and marketing strength of a combined Golden Circle and Heinz is realised.”
Heinz’s offer represents a premium of more than 300 per cent on the pre-announcement Golden Circle share price of 40cents and is subject to Heinz shareholder approval.
Independent auditor Ernst & Young has been appointed to the Golden Circle board to advise if the proposal is in the best interests of the company.
If approved, the acquisition will go ahead in late December .