Kraft Foods Inc on Tuesday said it has agreed to sell 114-year-old hot cereal brand Cream of Wheat to B&G Foods Inc. in a $200
The move is the latest divestiture by the largest North American food maker as it looks to focus resources on products such as cheese, snacks and beverages.
In anticipation of the sale, which also includes the Cream of Rice brand and related assets, Kraft posted a $69 million pretax asset impairment charge in the fourth quarter of 2006.
The sale is expected to dilute 2007 earnings by about 1 cent a share, the company said.
Kraft, which makes products from Oreo cookies to South Beach Diet foods, has been selling off several brands as it prepares to be spun off by parent company Altria Group . Altria has said it plans to announce details about the
spinoff next week.
B&G, which has assembled a portfolio of smaller brands that include Ortega Mexican foods and Polaner fruit spreads, said it will fund the acquisition with additional debt and that it has
received commitments for senior secured debt financing from Lehman Brothers and Credit Suisse.