LONDON (Brand Republic) – Diageo is selling some of its key food brands, including Pillsbury and Haagen-Dazs ice cream, to focus on its higher-margin drinks and spirits business.
News of the sell-off comes as Diageo looks at launching a consortium bid for the spirits arm of Canadian group Seagram. Although it would be barred from owning the entire business by competition authorities, a joint bid would secure some brands.
It is thought Diageo is seeking a trade buyer for Pillsbury, valued at between £5.5bn and £6.5bn and which accounts for one third of its sales. The Green Giant sweetcorn brand is also up for sale.
Sara Lee seems the most likely buyer among large food companies such as Heinz and Con-Agra, all of which are currently trying to build mass in a rapidly consolidating market.
Unilever (which recently bought Hellmann’s and Knorr parent group Bestfoods), Philip Morris and Nestle are now the three largest players.
If Pillsbury cannot be sold, it is thought the company will demerge it, but Diageo may have to wait for the dust to settle on its $20bn flotation of 20% of Burger King.