Kraft Heinz has entered into an agreement to sell its Canadian natural cheese business to Lactalis-owned dairy company Parmalat for CAD $1.62 billion ($1.23 billion).
The deal would see Parmalat Canada take stewardship of the cheese brands Cracker Barrel, P'tit Quebec and Amooza.
This operation, subject to the approval of canadian regulatory authorities, is expected to be completed in the second quarter of 2019, said the French group.
Kraft Heinz Canada will also transfer approximately 400 employees from that facility to Parmalat.
"We're excited about what this transaction means for our future growth and business in Canada", said Bernardo Hees, Chief Executive Officer of Kraft Heinz, in a press release. "This is part of a larger growth approach for Kraft Heinz and is in addition to our recently announced $100 million venture fund, Evolv Ventures".
Chicago-headquartered Kraft Heinz stressed it remains "steadfast in its commitment to the Canadian market", illustrated by its recent acquisition of the Vancouver-based Ethical Bean coffee brand. The company expects to use transaction proceeds primarily to pay down debt. Kraft Heinz directly employs 2,000 people in Canada.
RBC Capital Markets served as exclusive financial adviser to Kraft Heinz Canada, while Fasken Martineau DuMoulin LLP served as legal advisers.
In 2017, this division has achieved a turnover of 560 million canadian dollars, or approximately 374 million euros.
Canada manages dairy supplies by setting production quotas, prices and curtailing imports. Parmalat now has almost 3,000 employees and 16 dairy processing plants in Canada.
"If approved, the transaction will both secure and grow cheese production in Canada and make Parmalat Canada a more competitive company which in turn will help protect jobs and support dairy farm incomes", Parmalat said.