Lactalis to acquire Kraft Heinz’s natural cheese division

Lactalis Group has entered into a definitive agreement for the acquisition by its US affiliate of Kraft Heinz’s Natural, Grated, Cultured, and Specialty cheese businesses in the US, Grated cheese business in Canada, and entire International Cheese business outside North America.

With this acquisition, Lactalis will acquire a portfolio of iconic, strongly-positioned brands that include Cracker Barrel, Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s, and, outside the US and Canada only, Cheez Whiz. In addition, Kraft Heinz will partner with Lactalis on a perpetual license for Kraft in Natural, Grated and International cheeses and Velveeta in Natural and International cheeses.

Under the terms of the transaction, Lactalis will acquire three world-class Kraft Heinz production facilities located in Tulare, CA, Walton, NY, and Wausau, WI, and a distribution center in Weyauwega, WI. Approximately 750 Kraft Heinz employees will be joining Lactalis. The company expects to add additional American jobs to support this business following the closing of the transaction, which is expected in the first half of 2021, subject to regulatory approvals.

“The people of Kraft Heinz have built an extraordinary portfolio of high-quality cheese products and brands that consumers love and trust – and we are honored to have been chosen by Kraft Heinz to help carry this legacy forward,” said Thierry Clément, chief executive officer of Lactalis North America. “This combination of complementary offerings is a clear strategic and cultural fit that will create important new opportunities for domestic and international expansion, product innovation, and positive community and employee impact. We look forward to working with and learning from our new colleagues, building on our proud histories together and continuing our collaborative strategy for expansion — to invest, to include, to support, and to grow.”

With a portfolio of brands that includes Président, Galbani, Parmalat, Stonyfield Organic, Siggi’s, Karoun, rondele, and Black Diamond, Lactalis has a strong presence in the US with eight plants in New York, Vermont, New Hampshire, Wisconsin, Idaho, Arizona and California, and 2,600 employees across the country. The company has been an essential part of the US food supply for 40 years, a leader in responsible manufacturing and sourcing practices across America, and a key driver of expanded international demand for US-made cheese and dairy products. Lactalis is the US purchases nearly 3.2 billion pounds of milk annually from US dairy farmers, and the company’s US-made products are available nationwide and exported around the world.

Perella Weinberg Partners served as lead financial advisor to Lactalis Group for this transaction, while Dentons served as their legal advisors.

Lactalis Group, the world’s leading dairy group, is a French-family business founded in 1933 in Laval, France. Present in 51 countries, with 266 dairies and cheese dairies worldwide, its 85,000 employees promote milk in all its forms — cheese, drinking milk, yogurts, butters and creams, dairy ingredients, and nutrition.