NORTHFIELD, Ill. -- Kraft Foods Inc. said it has agreed to sell its Fruit2O water and Veryfine juice brands and related assets to Sunny Delight Beverages Co., a leading producer of juice-based drinks in North America and Western Europe.
The price tag on the deal was not disclosed. These brands had net revenues of approximately $135 million in 2006.
Fruit20 consists of two lines of waters:
Fruit20 water is the country's number one full-fruit flavored water beverage with zero calories, zero grams of sugar and zero grams of carbohydrates [image-nocss] per serving. It is made with natural fruit essence and is available in eight flavors: raspberry, strawberry, lemon, grape, orange, peach, cherry and lime. The second line, introduced earlier this year, is Fruit20 vitamin enhanced water that is enhanced with essential vitamins and minerals. It is available in four varieties: Immunity, Energy, Hydration and Relaxation.Veryfine offers three lines of beverages:
100% Juices and Juice Drinks in eight varieties: 100% Apple Juice, 100% Orange Juice, 100% Grapefruit Juice, 100% Grape Juice, Fruit Punch, Ruby Red Grapefruit Juice Cocktail, Kiwi Strawberry and Cranberry Juice Cocktail. Nectars in four varieties: apricot, peach, guava and pear. Chillers, a line of refreshing drinks in eight flavors: Glacial Grape, Tropical Freeze, Strawberry Lemonade, Lemon Lime Avalanche, Freezing Fruit Punch, Kiwi Strawberry, Papaya Ice and Pineapple Orange Frost"As we restore Kraft to reliable growth, we're focusing our investments on the brands that best fit with our long-term growth strategies," said Rick Searer, Kraft's executive vice president and president of Kraft North America. "Fruit2O and Veryfine are great brands that have found a wonderful home in Sunny Delight; however, for Kraft, we believe we will create greater long-term shareholder value by selling, rather than investing in, these brands."
The Veryfine plant in Littleton, Mass., will be part of the acquisition, as will a packing line at a Kraft facility in Fresno, Calif. As part of the transaction, approximately 200 Veryfine employees will join Cincinnati-based Sunny Delight.
"This acquisition will further accelerate our growth and continue our commitment to bring more wholesome beverage choices to consumers, said Billy Cyr, Sunny Delight Beverages CEO.
The transaction is expected to be completed during the fourth quarter. In anticipation of the sale, Kraft will record a one-time, pre-tax asset impairment charge of approximately $125 million in its third quarter. The after-tax impact to net earnings is a charge of approximately $55 million, equivalent to 3 cents diluted earnings per share. Kraft anticipates no material impact to earnings on an ongoing basis.
Kraft Foods, Northfield, Ill., is one of the world's largest food and beverage companies, with annual revenues of more than $34 billion. Brands include Kraft cheeses, dinners and dressings; Oscar Mayer meats; Philadelphia cream cheese; Post cereals; Nabisco cookies and crackers; Jacobs coffees and Milka chocolates. Kraft psun off from New York City-based Altria Group Inc. and became a fully independent company on March 30, 2007.
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