Lamb Weston has announced it will purchase the remaining 50% stake in its European joint venture with Meijer Frozen Foods for €700 million.
Lamb-Weston/Meijer manufactures nearly 2 billion pounds of frozen potato products annually at facilities in the Netherlands, UK and Austria.
The business generated approximately €954 million in net sales in fiscal 2022, which included €114 million from a joint venture partnership in Russia that Lamb-Weston/Meijer exited earlier this year.
Lamb Weston president and CEO, Tom Werner, said: “Lamb-Weston/Meijer was built over the last 28 years, and we’re grateful to Meijer Frozen Foods for their longstanding partnership. The joint venture has served as a strong platform to drive growth in Europe and the Middle East, as well as to support our global customer base across our key international markets.
“This transaction firmly aligns with Lamb Weston’s long-term capital allocation and acquisition framework, and we believe it will strengthen our manufacturing footprint by leveraging a truly global supply chain to better serve our customers and position us to take advantage of growth opportunities in Europe, the Middle East and Africa.”
The transaction is expected to close in the second half of fiscal 2023, subject to regulatory approvals. Upon completion, the former joint venture’s around 1,500 employees will become employees of Lamb Weston.
The purchase price consists of €525 million in cash and €175 million of Lamb Weston’s common stock.
“We remain confident in the long-term outlook for Lamb Weston and the global frozen potato category,” said Kees Meijer, CEO of Meijer Frozen Foods. “By holding an investment in [the] common stock of Lamb Weston after the transaction closes, we sustain our strong belief in a bright future for the business.”
By Antonia Garrett Peel
Source: foodbev.com
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