Heinz Company today announced that it has agreed to acquire an 80% stake in Coniexpress S.A. Industrias Alimenticias, a leading Brazilian manufacturer of the Quero brand of tomato-based sauces, tomato paste, ketchup, condiments and vegetables. The acquisition of the Quero business, which has annual sales of approximately $325 million, accelerates Heinz’s growth in Latin America and gives the Company its first major business in Brazil, the world’s fifth most populated nation.
“The Quero brand is a natural fit with the global capabilities of Heinz and gives us a scalable growth platform in Brazil, a key Emerging Market with nearly 200 million consumers and a growing economy,” said Heinz Chairman, President and CEO William R. Johnson. “This transaction is another significant step in our Emerging Markets strategy. With Quero, Heinz will be well positioned in the key Emerging Markets of Brazil, Russia, India, and China as well as Indonesia. We expect the Quero business to approximately double Heinz’s sales in Latin America in the first full year.”
The Quero brand holds number one or number two positions in numerous tomato-based categories in Brazil and the leading position in vegetables. The acquisition comes with a modern factory that is centrally located in Nerópolis and a new, fully automated distribution center. The Quero business has nearly 1,800 employees. Terms of the transaction were not disclosed. Heinz expects to close the transaction in the next few months.
Mr. Johnson said: “Brazil has been on our priority list for some time because it generates about 45% of Latin America’s Gross Domestic Product and is one of the fastest growing economies in the world. It is a market with attractive economic growth, a large number of middle-class consumers and strong upside potential.”
He said Heinz now expects Emerging Markets to generate more than 20% of its total sales in Fiscal 2012, which begins on April 28. This reflects continuing strong organic sales growth and the acquisitions of the Quero business, and Foodstar, a leading soy sauce manufacturer in China that Heinz purchased in November to accelerate growth in the world’s second-largest economy.
Heinz expects the Quero acquisition will be modestly dilutive to earnings in Fiscal 2012 as the Company invests in the business to drive growth, but accretive to earnings starting in Fiscal 2013.
