Birds Eye owner Unilever set to sell frozen foods arm
Unilever looked set to end its 63-year association with Birds Eye today after agreeing to sell most of its European frozen foods business for £1.16bn (€1.7bn).
The deal, which is subject to regulatory approval, will see the business, including 3,500 workers at a fish factory in Hull in England and at frozen vegetable operations in Suffolk taken on by private equity giant Permira.
The successful move by Permira has raised speculation that it could attempt back-to-back deals with an approach worth up to £900m (€1.3bn) for privately-owned FoodVest, which includes the Young’s Bluecrest Seafood business in the UK.
Industry analysts told the Financial Times today that further consolidation in the sector was the “next logical step” for Permira, which owns a string of UK assets including the AA motoring organisation and gaming firm Gala Coral.
It is thought that Permira outbid FoodVest’s private equity owner, CapVest, to land the Unilever frozen foods business, featuring Birds Eye brands in nine countries and the Iglo brands outside of the UK.
Unilever announced plans in February to sell the frozen foods business, although it decided to keep hold of Findus in Italy.
The Anglo-Dutch company took control of Birds Eye in 1943 when it became the majority shareholder in Frosted Foods which owned Birds Eye and the UK rights to a method of food preservation new to mass markets – deep-freezing.
The decision to sell Birds Eye and the other businesses came amid pressure on frozen food sales from other areas such as fresh meat.
Unilever chief executive Patrick Cescau said: “The frozen foods business has been great for Unilever over many decades with tremendous products, iconic brands and memorable advertising delivering value for our shareholders.”
The rest of Unilever’s portfolio includes Magnum ice cream, Lipton Ice Tea, Hellmann’s mayonnaise and Dove soap.
Permira partner Cheryl Potter said the private equity firm looked forward to supporting the growth of the “iconic” brands.
She added: “The market sees few food deals of this size and very rarely involving brands of this stature.”
The proposed sale, which is subject to regulatory approval and consultation with employees, is expected to be completed before the end of the year.
