Nestle to Gauge Interest From Smithfield, Cargill for Herta
Sale of lunch-meat business could fetch as much as $1 billion
Cofco, Tyson and Sigma to get marketing materials this month
By Vinicy Chan and Ruth David, Bloomberg
April 8, 2019
Nestle SA’s sale of its Herta lunch-meat business may attract interest from bidders including U.S. packaged meat company Smithfield Foods Inc. and agricultural commodities giant Cargill Inc., according to people with knowledge of the matter.
The Swiss company plans to send marketing material this month to potential investors including Tyson Foods Inc., China’s Cofco Corp. and Sigma Alimentos SA de CV of Mexico, said the people. Nestle is working with an adviser to divest the hot dog brand, in a deal that could value the unit at $800 million to $1 billion, said the people, who asked not to be identified as the information is private.
Deliberations are at an early stage and there’s no guarantee the talks will lead to a transaction, the people said. Buyout firms could also join the bidding, the people said. Representatives for Nestle, Cargill and Tyson declined to comment. A representative for Smithfield, the world’s biggest hog producer and owned by China’s WH Group, also declined to comment. Representatives for Cofco and Sigma didn’t respond to requests for comment.
Nestle in February announced that it’s putting the lunch-meat business up for sale as Chief Executive Officer Mark Schneider came under pressure from activist shareholder Dan Loeb to boost returns. The plan also follows the rise of health-conscious consumers, pushing Nestle further into plant-based alternatives for protein...
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