Conagra in Talks to Sell Hebrew National to JBS -- Update
10 Marzo 2021 - 02:15AM
Dow Jones News
By Jacob Bunge and Cara Lombardo
Hebrew National may soon answer to a different authority.
Conagra Brands Inc. is in talks to sell the famous hot dog brand
to Brazil's JBS SA, people familiar with the matter said.
A deal, which the people said could also include the Egg Beaters
and Odom's Tennessee Pride brands, could be valued at around $700
million. Any agreement is likely weeks away and Conagra could end
up keeping the business or selling it to someone else, the people
cautioned.
Conagra in April 2019 said Hebrew National's sales over the
previous year were $170 million, and Egg Beaters' were $78 million.
But the kosher hot dog's popularity and cultural cache transcend
the brand's size, thanks in part to its long-running slogan, "We
answer to a higher authority."
Conagra, which has a market value of around $17.6 billion, has
been retooling its portfolio to boost its frozen food and snack
brands such as Healthy Choice and Slim Jim.
For JBS, the biggest beef processor in the U.S., buying the
business would expand its reach into grocery store meat cases at a
time when consumers have shifted their food-buying preferences
toward supermarkets and away from sit-down restaurants.
JBS has a market value of over $12 billion and derives most of
its revenue from the U.S., where its businesses include the Swift
beef and pork-processing company and Pilgrim's Pride, the nation's
second-largest chicken supplier.
Should JBS clinch the deal, it would expand its portfolio of
consumer brands, which the company aims to build. Name-brand meat
products tend to carry higher profits than bulk meat sold to
restaurants, and to supermarkets in shrink-wrapped trays. In
February 2020, JBS announced a $238 million deal to buy Empire
Packing Co., parent of the Ledbetter-branded retail-meat
products.
Hebrew National's kosher franks were first sold in New York City
in 1905, and Conagra acquired the brand's parent company in 1993.
Over the decades, the all-beef hot dogs have become a staple at
baseball stadiums and backyard cookouts.
In early 2019, the brand's sales were running slightly behind
the overall hot dog category and Conagra executives said they
planned to update its marketing and incorporate additional beef
cuts like brisket.
Sales of pantry staples surged roughly a year ago when
stay-at-home orders began in the early days of the pandemic, giving
a jolt to classics that had fallen out of favor with consumers.
Hebrew National's retail sales jumped 39% in the quarter ended May
31, Conagra reported.
But demand for some packaged foods has waned as people return to
restaurants and offices, prompting companies to resort to deal
making to keep up with changing consumer tastes.
Kraft Heinz Co. in February agreed to sell its Planters nut
business to Spam maker Hormel Foods Corp. for $3.35 billion. Like
JBS, Hormel has been focusing its portfolio on protein-heavy food
brands.
Kraft rival Mondelez International Inc. has signed two small
deals so far this year: It agreed to buy Gourmet Food Holdings, a
cracker brand popular in Australia this week and the rest of Paleo
chocolate-bar maker Hu Master Holdings in January.
--Annie Gasparro contributed to this article.
Write to Jacob Bunge at jacob.bunge@wsj.com and Cara Lombardo at
cara.lombardo@wsj.com
(END) Dow Jones Newswires
March 09, 2021 20:00 ET (01:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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