Osem finds buyer for Beit Hashita pickles

Beit Hashita
Beit Hashita

Din Marketing and Roasting is on the verge of signing an agreement to buy the plant.

After two years of searching for a buyer, Osem, owned by Swiss food corporation Nestle, will sell the Beit Hashita pickles plant to Din Marketing and Roasting, owner of the Shkedia brand, sources inform "Globes." Din Marketing, led by Yigal Alel, is in the final stages of signing an agreement to acquire the plan. The price is believed to be NIS 55 million, half of the amount reported at the beginning of the sale talks.

Beit Hashita is the pickles market leader with a 35% share of the NIS 378 million in sales in the category in 2018, according to figures from StoreNext. Completion of the deal is subject to various approvals, including from the Israel Competition Authority.

The sale is taking place two years after Osem, managed by CEO Avi Ben Assayag, began looking for a potential buyer for its pickled vegetables activity, in which it has 60 employees. Over the past two years, Osem has held sales talks with a number of concerns, including Sanlakol, a public company.

Osem has wanted to withdraw from the pickles sector, which is not part of its core business, for a long time. Pickles products are basic with fairly low added brand value. They depend on fruit and vegetables and price fluctuations affected by supply.

Strengthening booth activity in marketing chains

Din Marketing is a dominant company in the local market. Its sales account for 0.6% of all food and beverage products in Israel, according to StoreNext figures. The company's sales to the retail market alone are estimated at NIS 225 million a year. Din Marketing specializes in importing and marketing nuts, seeds, dried fruit, and spices. Its activity includes 60 booths and stores within a store in retail chain branches. The company also has a sales apparatus for selling gift packages to workers' committees and the private market.

Din Marketing owns a number of prominent brands, such as Shkedia, Sasson Hakole, Hakole MiBaghdad, and Nofet Dagan. The company has 200 employees and a logistics center in Modi'in. Acquiring pickled vegetables activity is compatible with its portfolio of stands that it operates in marketing chains.

"Globes" recently reported another deal in the pickles market, in which canned pickled vegetables manufacturer Kvutzat Yavne sought to acquire competing company Bnei Darom. The deal was submitted to the Competition Authority for approval a month ago.

Change in strategy in the company's business portfolio

The current deal follows two other deals by Osem for the sale of what it said was not part of its core business. Two and a half months ago, Osem signed a deal to sell its ice cream business to ice cream giant Froneri for a price believed to be in the tens of millions of euros. In this deal, Osem will sell its holdings in an ice cream subsidiary, although Nestle will retain a 50% share in it. The deal, which has not yet been completed, is awaiting approval by the Competition Authority. The sale is part of Nestle's worldwide consolidation of the ice cream companies operating under it around the world, while selling other ice cream companies.

Another sale by Osem is of its money-losing sauces activity in the US. In last 2018, "Globes" reported that Osem-Nestle had sold Tribe Mediterranean Foods, its chilled salad company in the US, to Lakeview Farms.

Osem is currently in the process of moving the Tivall plant from Kibbutz Lohamei HaGeta'ot to the company's industrial complex in Kiryat Gat, which will take two years to complete. Last year, Osem inaugurated a plant in a new building in Kiryat Gat at a cost of NIS 200 million.

Published by Globes, Israel business news - en.globes.co.il - on September 25, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Beit Hashita
Beit Hashita
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