Premier Foods Share News (PFD)

Fri, 15th Jun 2012 07:54

LONDON, June 15 (Reuters) - Britain's Premier Foods agreed to sell its vinegar and sour pickles unit, including the famous Sarsons vinegar brand, to Japan's Mizkan as part of an ongoing bid to turn around its struggling business by getting rid of non-core assets.

The deal was agreed for a cash consideration of 41 million pounds ($63.7 million), Premier Foods, said in a statement, and is expected to complete by the end of July.

Chief Executive Michael Clarke said the move was 'another important step' in the strategy of focusing on core brands.

The group is grappling with high levels of debt and tough trading conditions as consumers face lacklustre growth in wages and worries about the euro zone debt crisis.

The maker of Hovis bread and Bisto gravy pledged to focus on eight key brands, which also include Mr. Kipling cakes and Sharwood's curry products, as part of the terms of a debt restructuring agreement struck in March.

The company said the proceeds from the sale would be used to pay down debt.

Sarsons malt vinegar, first created in 1794, became known for its former advertising slogan - 'Don't say vinegar, say Sarsons.' The company says on its website that every day, nearly 9 in 10 portions of chips are served with Sarson's vinegar.

The unit also includes the Haywards brand of pickles in vinegar and the Dufrais speciality vinegar brand.

The products are mostly manufactured at the company's Middleton site, near Manchester in northern England, and all employees are expected to work for the buyer once the sale process is complete, Premier Foods said.

'We are excited to acquire two strong and iconic brands that have such a deep heritage in the UK. Sarson's and Haywards are beloved by consumers,' said Mizkan Chief Executive Kazuhide Matazaemon Nakano VIII. ($1 = 0.6434 British pounds)



(Reporting by Helen Massy-Beresford; Editing by Paul Hoskins) Keywords: PREMIERFOODS/BRIEF

(helen.beresford@thomsonreuters.com)(+44 207 542 3112)

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