British consumer health giant Reckitt Benckiser has agreed to offload its sauces division to U.S. spicemaker McCormick for $4.2 billion (3.6 billion euros), the groups said Wednesday.
McCormick expects the hot sauce category will continue to see robust growth and said it would integrate the business, RB Foods, into its consumer and industrial segments, and retain the top brand names like French's, Frank's RedHot and Cattlemen's.
The U.S. maker of spices and seasonings has been trying to expand its global presence. Last year it approached Premier Foods, the owner of British food brands like Mr Kipling cakes and Oxo stock cubes. Premier rejected a twice-improved 65 pence-per-share takeover offer.
The Maryland-based group's top U.S. brands include McCormick, Grill Mates and McCormick Gourmet. It also sells Schwartz seasoning in Britain and Ducros in France.
RB Food brands include French's mustard and Frank's RedHot sauce, which will now become McCormick's second and third biggest sellers respectively.
RB Food was "a strong complementary fit that we expect will strengthen McCormick's business opportunities as we expand our presence in condiments, a core category for the company in the US and internationally," said McCormick boss Lawrence E. Kurzius in a separate statement.
The divestment follows Reckitt's purchase of U.S. infant and child nutrition specialist Mead Johnson in February for $16.6 billion.
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