US: Sunny Delight acquires Kraft Foods' juice brands
Kraft Foods has agreed to sell its Fruit2O water and Veryfine juice brands and related assets to Sunny Delight Beverages Co.
The company said today (2 October) that its brands had net revenues of US$135m last year, but that it believes greater long-term shareholder value can be obtained by selling, rather than investing.
Kraft North America executive vice president and president Rick Searer said: "As we restore Kraft to reliable growth, we're focusing our investments on the brands that best fit with our long-term growth strategies. Fruit2O and Veryfine are great brands that have found a wonderful home in Sunny Delight. However, for Kraft, we believe we will create greater long-term shareholder value by selling, rather than investing in, these brands."
The sale includes the brands Fruit2O, Fuel2O and Veryfine, various manufacturing equipment and the Littleton, manufacturing facility, the company said. Approximately 200 employees will join Sunny Delight when the transaction completes during the company's fourth quarter.
Searer added: "We are grateful to the Veryfine employees for their commitment and dedication to the business, and wish them continued success in the future,"
Kraft said that in Q3 it plans to record a pre-tax asset impairment charge of US$125m. The after-tax impact to net earnings is a charge of $55m, equivalent to $0.3 diluted earnings per share.
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