Strauss Group Ltd. (TASE:STEL) and Pepsico Inc. (NYSE:PEP) have signed an agreement to create a joint venture partnership to operate in equal shares hummus maker Sabra Salads Food Industries Ltd. in North America. Pepsico will own its share through Frito-Lay North America. The companies expect to close the deal by the end of February 2008.
Prior to this agreement, Strauss owned 51% of Sabra through its US subsidiary and a company owned by Yehuda Pearl owned 49%. Pepisco bought Pearl's stake in Sabra plus 1% of the company from Strauss for $45 million altogether.
Pepsico said that that Sabra is the "the top-selling and fastest-growing maker of hummus, with sales approaching approximately $56 million through September of this year. Last year, total US sales of hummus grew to $180 million."
Strauss Group president and CEO Erez Vigodman said, "Thanks to its experience and know-how in the development, manufacturing and marketing of fresh food products, Strauss Group has been developing a new food experience in the US by identifying the potential in the fresh dips and spreads business. I am convinced that the partnership between Frito Lay and Strauss will create a complementary set of competencies and expertise that will allow Sabra to lead the fresh dip category and offer consumers in North America a range of fresh dips that meets their desire for healthier, fresh foods."
Strauss added that it expected to report a capital gain of $9 million on the deal. The share rose over 4% by mid-afternoon. Strauss originally bought its stake in Sabra in August 2005.
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2007
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