Reckitt sells sauces business to McCormick for $4.2 bn

British consumer health giant Reckitt Benckiser has agreed to offload its sauces division to US spicemaker McCormick for $4.2 billion (3.6 billion euros), the groups said Wednesday.

"Reckitt Benckiser Group plc is pleased to announce that it has entered into an agreement to sell its food business, including the French's, Frank's RedHot and Cattlemen's brands, to McCormick & Company Inc.," Reckitt said in a statement after a strategic review.

The price tag reflects "the quality of this highly profitable, growth business".

The deal will hand McCormick a leading position in the condiments sector in the United States. It is currently the tenth biggest player.

The Maryland-based group's top US brands include McCormick, Grill Mates and McCormick Gourmet. It also sells Schwartz seasoning in Britain and Ducros in France.

RB Food brands include French's mustard and Frank's RedHot sauce, which will now become McCormick's second and third biggest sellers respectively.

RB Food was "a strong complementary fit that we expect will strengthen McCormick's business opportunities as we expand our presence in condiments, a core category for the company in the US and internationally," said McCormick boss Lawrence E. Kurzius in a separate statement.

The divestment follows Reckitt's purchase of US infant and child nutrition specialist Mead Johnson in February for $16.6 billion.

That deal took Reckitt, whose brands include Durex condoms and Nurofen painkillers, into the baby-food market for the first time -- and targeted rapid expansion in fast-growing Asian markets like China.

"Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene," said Reckitt chief executive Rakesh Kapoor.

The deal will create a combined group with annual sales of around $5 billion dollars (£3.8 billion).

source: AFP