Brands that will be a part of the acquisition include French’s Frank’s Red Hot and Cattlemen’s
French's new owner, McCormick, will acquire the business after it failed to takeover Premier Foods a year ago. Money gained from selling French's would go to reducing its debt following the Mead Johnson acquisition, it said.
RB Food was "a strong complementary fit that we expect will strengthen McCormick's business opportunities as we expand our presence in condiments, a core category for the company in the USA and internationally", said McCormick boss Lawrence E. Kurzius in a separate statement.
"McCormick's acquisition of Reckitt's food arm brings the company very close to Kraft Heinz's leadership position in sauces, dressings and condiments in the US, with now just two percentage point difference in share", said Lianne van den Bos, senior food analyst at Euromonitor International. Last April, McCormick acquired Australia's Botanical Food Company, which makes the Gourmet Garden brand of packaged herbs. It will also enable it to focus more closely on its consumer health and home brands, which include Durex condoms and Mucinex cold medicine.
Shore Capital analyst Darren Shirley says Reckitt "is achieving a very attractive valuation for a North American food business, in our view".
McCormick anticipates that the hot sauce category will continue to see robust growth, and with insight-driven innovation and a passionate and increasing fan base, there are significant opportunities for expansion.
Reckitt Benckiser shares rose nearly 1.3% after it announced the sale of its food unit.
Previous year it approached Premier Foods PFD.L , the owner of British food brands including Mr Kipling cakes and Oxo stock cubes, but was rebuffed.
French's Food will be sold after Reckitt's a strategic review of its business, in a bid to free up funds for its acquisition of baby food manufacturer Mead Johnson Nutrition. The two businesses combined will have approximately $5 billion in sales.
Credit Suisse advised McCormick on the deal, while Morgan Stanley advised Reckitt.
Subject to regulatory approvals, the deal is expected to complete during the third quarter of 2017.
Why Was Katrina Kaif's Voice Dubbed In Jagga Jasoos?
It is co-produced by Ranbir's Picture Shuru Productions, Basu's Ishana Movies and is the last production of Walt Disney India. From the critics to the public, everyone had praised Ranbir's performance from day one and looks like that trend continues...
Facebook Messenger is introducing adverts
Lastly, " Sponsored messages " will allow businesses to re-engage with people who have previously started conversations with them. Facebook has already completed its initial pilot program which happened in Australia and Thailand back in January of this year.
Samsung Pay adds PayPal as a valid means of payment
PayPal is focused on delivering seamless mobile commerce experiences and extending this reach through strategic partnerships. What's more, PayPal Braintree support also means that online merchants will also support the payment option.
Ostapenko falls to Venus Williams at Wimbledon
Williams, 37, is now the oldest Grand Slam singles finalist since Martina Navratilova finished runner-up at Wimbledon in 1994. I think my experience helped a lot", Williams said . "It's a win-win situation, frankly, and I'm thrilled for her".