Mondelez to offload Philadelphia cream cheese as part of wider $3bn grocery brands sell-off
Mondelez International is to offload the Philadelphia cream cheese brand as part of a wider £3bn sell-off of its grocery brands.
The snacks business has informed bidders that the brands will go up for sale next month, according to The Sunday Times. American banks JPMorgan and Goldman Sachs have been brought in to help with the sale of the division, which while has performed well for Mondelez, particularly the Philadelphia brand, is deemed surplus to requirements.
Rights to Philadelphia are owned by Kraft, which Mondelez was spun off from in 2012 and then merged with Heinz last year. Heinz has an option to buy back the European rights to the cream cheese, though there is reportedly a long list of other suitors should it choose not to.
French dairy business Lactalis has been identified as one potential bidder alongside private equity firms such as Advent International and Carlyle, both of which have eyed other Mondelez brands for several years.
Rumours that Mondelez would put its grocery and cheese business up for sale first surfaced last September just months after it turned it into a standalone business.
At the time, the company’s chief executive Irene Rosenfield said there were no immediate plans to sell off the unit, though her business has come under more pressure to generate cash in the months since following criticisms from American activist investors Nelson Peltz and Bill Ackman. Ackman has tipped Mondelez, which has reported nine consecutive quarters of slow growth, to be the subject of a bid from one of the bigger food groups.
Mondelez has already spun off its coffee business in a join venture with D.E Master Blenders to form Jacons Douwe Egberts. The deal was completed last July, with Mondelez owning a 43.5 per cent that will free it up to focus on its snacks and confectionery business.
FMCG businesses, struggling for growth and profitability worldwide, are trying to boost performance by offloading non-core and underperforming brands and businesses. These firms have also been aggressively acquiring brands and companies that can bolster their long-term objectives that are likely to result in lifting profits.