* Mizkan Group looks to counter slowing domestic growth
* All-cash deal values sauce business at 3.6 times sales
* Unilever restructuring close to completion (Writes through, adds context, analyst comment)
By Martinne Geller and Paul Sandle
LONDON, May 22 (Reuters) - Mizkan Group has agreed to buyUnilever's Ragu and Bertolli pasta sauce brandsfor $2.15 billion, continuing a trend for Japanese consumergoods companies diversifying through Western assets.
The all-cash deal, which values the sauce business at 3.6times its annual sales, boosts the Japanese condiments maker'spresence in North America's grocery aisles as declining birthrates and an ageing society stifle growth at home.
The companies announced the deal on on Thursday afterReuters reported late on Wednesday that the parties were inadvanced talks, nearly a month after Unilever said it wasweighing options for the sauces business and for its strugglingSlim-Fast brand.
The sale of those operations, plus the recent disposals ofSkippy peanut butter and Wishbone salad dressings, will completethe restructuring of Unilever's North American portfolio, thecompany said, as the group sharpens its focus on its mostprofitable products.
Unilever, which still owns food brands such as Ben & Jerry'sice cream, Knorr soups and Hellman's mayonnaise, also hasmargarine and spreads brands in its portfolio, including Floraand Becel. These, however, have been hurt by a shift in consumertastes away from chemical ingredients, leading some analysts tosuggest that they, too, could be sold.
PERISHABLE ASSETS?
Deutsche Bank analyst Harold Thompson said he expectsUnilever to continue to make modest food disposals, though hedid not name specific brands.
"The key is for the dilution of this disposal strategy to beoffset by the enhancement of acquisitions in (home and personalcare) markets for it to be a success over the long term,"Thompson said.
Unilever has been vocal about its desire to focus more onpersonal care brands, which enjoy higher margins and growth inemerging markets.
"Food is in the doldrums in mature markets," one consumeranalyst said.
Thursday's deal also marks another step in thesimplification of Unilever, with the company created by the 1929merger of English soap company Lever Brothers and Dutchmargarine company Margarine Unie saying this week that it wasbuying out the rights of its co-founder's family trusts.
LOOKING WEST
For Mizkan and rival asian groups, however, the deal stepsup a shift towards Western markets, spurred by slowing domesticgrowth and cash-heavy balance sheets.
Mizkan already had Britain's Branston Pickle and Sarson'svinegar in its growing larder and fellow Japanese group SuntoryHoldings closed a $16 billion takeover of U.S.bourbon company Beam Inc last month, following last year'sagreement by Suntory Beverage & Food to buy UK drinksLucozade and Ribena from GlaxoSmithKline.
But it's not only the Japanese that are hungry for more.
Emperador Inc of the Philippines agreed this monthto buy Scotch whisky company Whyte & Mackay from United Spirits, and China's Bright Food Group said onThursday that it would buy control of Tnuva, Israel's largestfood company, from private equity firm Apax.
Mizkan, which says it is the world's leading provider ofrice wine vinegar, already owns U.S. cooking wine brand HollandHouse and Border Foods, which makes Mexican sauces and peppers.
The pasta sauce business gives it additional annual turnoverof more than $600 million and the leading brand in a market withannual sales of $2.3 billion.
The deal is expected to close by the end of June and isbeing financed by the proceeds of a new fully committedfinancing facility.
Unilever shares slipped 0.7 pct to 26.75 pounds by 1339 GMT. (Editing by David Goodman)