Mustard, ketchup maker French's sold in $4.2B deal

UPDATE 1-McCormick to buy Reckitt's food unit for $4.2 bln

The Baltimore-based company said Tuesday it will acquire the French's, Frank's Red Hot Sauce and Cattlemen's brands from British food company Reckitt Benckiser.

Lawrence E. Kurzius, chairman, president and CEO of McCormick, said RB Foods' focus on creating products with simple, high-quality ingredients makes it a ideal match for McCormick as it continues to capitalize on the growing consumer interest in healthy, flavorful eating.

"McCormick's acquisition of Reckitt's food arm brings the company very close to Kraft Heinz's leadership position in sauces, dressings and condiments in the USA, with now just two percentage point difference in share", said Lianne van den Bos, senior food analyst at Euromonitor International. And McCormick finally emerged as the highest bidder for the food unit on Wednesday. The company's brands include Nurofen, Woolite and Clearasil.

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Reckitt's sale of its French's mustard division to McCormick will bring much-welcome fee trouserings for Morgan Stanley and Robey Warshaw.

Unilever shares were up at 0.35%, changing hands at 4,305 pence, extending a 9.22% over the past three months, while Premier Foods plc PRRFY, a former McCormick target, gained around 0.5% after having lost 11.05% over the past three months.

McCormick chief executive Lawrence Kurzius, said the deal enables his group "to become a one-stop shop for condiment, spice and seasoning needs". McCormick plans to fund the deal with a combination of equity and debt, and said it has obtained committed bridge financing. With 411 million pounds ($536 million) in sales past year, French's Foods accounted for 4 percent of Reckitt's total revenue. The addition of Mead Johnson's infant and children's nutrition business is expected to increase Reckitt Benckiser's revenues in consumer health by approximately 90 percent and increase its developing market scale by approximately 65% percent. A year ago it approached Premier Foods, the owner of British food brands like Mr Kipling cakes and Oxo stock cubes.

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