Italy-based Newlat Food has struck a deal to acquire UK food-and-drinks company Princes from Japan’s Mitsubishi Corp. for £700m ($893.6m).

The new business, to be called New Princes Group, will be a company generating annual revenue of around €2.8bn ($3bn), and adjusted EBITDA of approximately €190m.

A Princes Group spokesperson told Just Drinks: “The final purchase agreement is expected to be signed in the coming months.”

The acquisition is contingent on consultation with the Dutch Works Council of Princes and the European Works Council, as well as “receipt of a number of customary regulatory approvals” and the “finalisation of the group’s audited accounts”.

When asked whether the deal would affect any jobs at the business, the spokesperson added: “The business is being bought as a whole and it’s not possible to offer any detail on potential changes as the process is not complete yet”.

Newlat Food is putting up £650m from its existing resources and loans. The remaining £50m will come from the proceeds of the sale of shares in Newlat Food to Mitsubishi.

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When the deal is completed, Mitsubishi will become Newlat Food’s second-largest shareholder with 21.2% of the economic rights in the company and 15.1% of its voting rights.

The merged company intends to achieve an annual turnover of €5bn by 2030. It also expects to boost profits “through a combination of cost and structural synergies”, Princes said.

Princes is still expected to “retain its identity… as a UK-based subsidiary of the New Princes Group”, it said.

New Princes Group will have “a global operating network” of 31 factories, doing business across “ten distinct categories”.

Princes’ portfolio includes canned food brands such as Branston baked beans, Batchelors mushy peas and Crosse & Blackwell ready-to-eat soups, as well as Italian foods brand Napolina and the squash maker Jucee.

The Liverpool-headquartered business sells its range of branded and unbranded products via major retailers in the UK. It also supplier international retailers across the Pacific Rim, Middle East and Africa with canned foods, edible oils and its Italian foods range,

Reggio Emilia-based Newlat first signaled its intentions to snap up Princes last December, when it confirmed it was in “very advanced” negotiations with Mistubishi Corp.

These talks were then paused in February, as its latest offer, which accounted for a drop in demand and lower inflation in the UK, was rejected by Mistubishi.

Commenting on the news, Princes CEO Simon Harrison said: This is an exciting prospect for Princes and we are delighted that Newlat share our confidence in the group’s strategic growth plans, brand strategy, operational excellence and people culture. The intended sale remains an ongoing process and further information will be shared in due course.”         

Founded in 2004, Newlat produces a range of brands across its milk and dairy, pasta and bakery, ready-meals and specialist snacks segments. These include Mug Shot instant soups, Delverde dried pasta, Sansepolcro crostini and Matese milk and cheese.

It operates in Italy, Germany, the UK and France, through its subsidiary groups Centrale del Latte d’Italia, Newlat Deutschland, Symington’s and EM Foods.

“The newly combined group will offer a broad range of high-quality products, addressing the needs of an increasingly demanding and diverse global market,” Newlat Food chairman Angelo Mastrolia said.