Arnott’s Group, the Australian food manufacturer, plans to create a new division for cereals and snacks after entering an agreement to take a majority stake in Diver Foods.
Diver Foods, based in Victoria, also produces snacks and cereals. Arnott’s, which is owned by private-equity firm KKR after a deal with Campbell Soup Co. in 2019, is seeking to acquire a 75% interest in the target company, with its managing director and owner Chris Diver to retain a 25% stake in the business.
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Financial terms were not disclosed.
Once the deal is completed, expected later this month, Arnott’s will form a new division, Good Food Partners, which will also accommodate the cereals and snacks assets the company agreed to acquire from Australia’s Freedom Foods in December. Arnott’s anticipates that transaction will close in March.
“The acquisition is part of an ambitious growth strategy that involves entering new product categories,” Arnott’s said in a statement. It currently manufactures biscuits such as the TimTam brand, juices and soups, while Arnott’s also has a licensing agreement to distribute Campbell products in the Asia Pacific.
Arnott’s CEO George Zoghbi said: “The Arnott’s Group has become the custodian of a 150-plus year legacy of Australian food manufacturing and we have made no secret of our desire to build on that legacy by expanding our operations locally. Diver Foods presents a fantastic strategic growth opportunity for us, with products and capability that will complement our existing brands, while helping to diversify our iconic product portfolio and drive our entry into new categories.”
Diver Foods’ MD Mr. Diver added: “Over the last 18 years, Diver Foods has successfully partnered with an array of leading brands and retailers to become one of Australia’s largest cereal and snacking manufacturers. We see huge potential for the future and are excited at the prospect of joining with a business like the Arnott’s Group that has similar values and strong Australian heritage.”
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