Strauss Group (TASE: STRS) has announced that it is selling its 50% stake in Sabra Dipping Co., and PepsiCo-Strauss Fresh Dips & Spreads International GmbH (Obela) for $243.8 million.
In 2005, Strauss acquired 51% of Sabra for $9 million and in 2008 PepsiCo bought the balance of the shares and formed a joint venture with PepsiCo, with each owning 50%. Since that time Sabra has become the biggest dips and spreads company in the US and the leader in the hummus market. Subsequently the company expanded outside of the US with the Obela brand.
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In addition, Strauss will receive an option to buy a 2.5% stake in PepsiCo’s salted snacks operations in Israel.
The deal to sell Sabra reflects a continuation of Strauss’s 2024-2026 strategy of focusing on its core activities. This latest strategy includes strengthening its home base in Israel, expanding operations in Brazil, continued growth in its water activities worldwide, while continuing to invest in developing its abilities and strengthening its resilience and preparedness for the future.
Sabra operates in the refrigerated fresh dips, salads and spreads field in the US and Canada while Obela operates in Australia, New Zealand and Mexico with an emphasis on hummus and guacamole. Sabra is the biggest dips and spreads brand in the US in terms of sales and market share, according to IRI data, while in terms of hummus it has the biggest market share in the US.
Sabra and Obela have 700 employees (as of the end of 2023) and an advanced production plant in Virginia.
Strauss CEO Shai Babad said, “The move constitutes another pillar in the implementation of the group’s strategy, which aims to focus on the core business, leverage our resources in the best possible way, and lead significant business moves for Strauss. We thank all Sabra employees of all generations and PepsiCo for the extraordinary journey from a small salad company to the leader in the hummus market in the US.”
Strauss estimates that it will record a net capital gain in the range of NIS 319-325 million from the deal in its 2024 financial results.
Published by Globes, Israel business news – en.globes.co.il – on November 22, 2024.
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