The food manufacturing giant has decided to sell its ‘jellies and sweet spreads’ unit as part of wider plans to cut its debt. The sale, worth £200m, follows the offloading of Sarson’s vinegar and Haywards pickles in June this year. Premier Foods says it wants to dispose of £330m worth of brands by mid-2014 so that it can focus on its ‘power brands’, which includes Hovis baked goods, Bachelors and Sharwood’s.
Premier Foods is the UK’s largest food manufacturer, but has found itself in difficulty because of a gargantuan pension scheme deficit that threatened to cripple the company. It has had to renegotiate debts with its banks and secure an extension on the amount of time it is allowed to repay £1bn worth of loans. In total, it’s cost-cutting scheme is expected to shed around 600 workers, but it insist many of them will be taken on by the new owners of the brands it is selling.
Meanwhile, sportswear retailer JD Sports has decided to get rid of its Canterbury rugby label, selling it to rival sports retail group Pentland for around £23m. The deal will include a swap whereby JD acquires the OneTrueSaxon brand from Pentland for a cheeky £50,000. Why on earth Pentland would want the Canterbury brand is a mystery to us however, considering JD openly claims it does not shift much of the stock, and only bought it in 2009. Eliminating a rival, perhaps?
So, a little frisson for M&A lovers out there today. But at least they are strategic moves rather than further high street woes, eh?