Kraft Heinz shares rise after agreement to sell cheese company for $ 3.2 billion to French Lactalis


Actions de Kraft Heinz Co. KHC,
+ 0,31%
rebounded 1.9% in the midday session Tuesday after the food company confirmed an agreement to sell part of its cheese business for $ 3.2 billion to the US subsidiary of the Lactalis Group, based in France. The deal includes Kraft Heinz natural, shredded, cultured and specialty cheese businesses, which in the 12 months ended June 27, 2020, contributed approximately $ 1.8 billion in sales. The company said it plans to use the proceeds to pay off debt. The agreement includes the sale of its production facilities in Tulare, California; Walton, NY; and Wausau, Wisconsin, and a distribution center in Weyauwega, Wisconsin. Around 750 employees will be transferred to Lactalis. The Wall Street Journal had earlier reported that a deal was near. The announcement also comes after Kraft Heinz announced plans to cut costs by $ 2 billion over five years. The stock has gained 1.1% year-to-date, while the S&P 500 SPX,
+ 0,52%
nailed 5.7%.


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