Reckitt Benckiser, the FTSE 100 company behind Durex and Nurofen, has agreed the sale of its food business to a US firm for £3.2bn.
US-based French’s Food, which includes the French’s mustard, Frank’s RedHot and Cattlemen’s brands, was sold to McCormick & Company following a strategic review of the business, RB said.
It added that McCormick would retain the leading brand names of French’s, Frank’s RedHot and Cattlemen’s as the US company looked to expand its condiments offering to achieve a portfolio with net sales of $5bn annually.
Reckitt said the deal was on a cash free, debt-free basis, and it would use the proceeds from the sale to reduce its debt.
In April, Reckitt said it was reviewing strategic options for the operation following its planned $16.6bn purchase of baby formula firm Mead Johnson.
Rakesh Kapoor, chief executive of RB, said: “Our French’s Food business is a true reflection of RB’s strengths – a portfolio of great brands driven through a culture of innovation by passionate people to deliver consistent outperformance.
“We are pleased to be selling to owners who can provide the necessary resources, market expertise and global platform, whilst being a good home for our people.”
McCormick said it expected to achieve cost savings of about $50m by 2020 – but gave no further details.
The deal represents a success for the firm after a failed bid to buy Premier Foods last year.
The owner of Mr Kipling cakes and Oxo stock cubes rejected its advances twice.
RB and McCormick expect the deal to close in the autumn, subject to regulatory approvals.