Kraft Foods has agreed to sell off its sugar confectionery business, which includes the popular Altoids and Life Savers brands, to Wm. Wrigley Jr. Co. for about $1.5 billion.
The deal allows Wrigley to expand its expertise and distribution capabilities in the candy category, leaving Kraft to focus on the rest of the food market.
The sale also includes the Crème Savers, Trolli and Sugus brands as well as a number of production facilities. The sugar confectionary business represented about 1.5% of Kraft’s global revenues.
“The divestiture is part of our strategy to transform Kraft’s portfolio,” said Kraft CEO Roger K. Deromedi, in a statement. “By enabling us to better focus our resources, the sale should create value for Kraft, as well as our employees, customers and shareholders.”
Kraft said that approximately 700 employees, working mostly in manufacturing in the sugar confectionary business, are expected to transfer to Wrigley as part of the sale.
The deal is expected to be completed by mid-2005 and to result in an after-tax loss of about $370 million for Northfield, IL-based Kraft.
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