Vegemite is returning to Australian hands.
American food giant Mondelez International(MDLZ) - Get Report announced Wednesday, Jan. 18, that it would sell most of its Australian and New Zealand grocery business, including the iconic Vegemite spread, to Australia's Bega Cheese for A$460 million ($345.8 million).
In addition to Vegemite, Bega will acquire Mondelez's ZoOSh salad dressing and Bonox beef extract brands, as well as other Kraft-licensed brands, ranging from Easy Mac to peanut butter. The license for Mondelez's Philadelphia cream cheese brand is not included in the sale.
Mondelez saw its shares tick up about a percent, or 46 cents, in afterhours trading to $45.03 per share. The company shares have fluctuated greatly since hitting a 52-week-low of $35.88 in February 2016 amid a flurry of M&A discussions.
At the end of 2016 Mondelez attempted a $23 billion bid for Hershey Co.(HSY) - Get Report . After Hershey rebuffed the bid, industry watchers speculated Mondelez could merge with Warren Buffett's Kraft Heinz(KHC) - Get Report or look to reshuffle its portfolio via small- or middle -market M&A.
As far as its Vegemite sale, "The move enables Mondelez International to further focus its portfolio and drive profitable growth by investing in its core snacks categories and Power Brands," Mondelez said in a statement, referencing the company's core brands that include Cadbury chocolate and Oreo cookies.
Also included in the sale is Mondelez's manufacturing site in Port Melbourne. The site's 200 employees will be offered positions at Bega.
Amanda Banfield, Mondelez's Vice President for Australia, New Zealand and Japan, said in a statement that the Deerfield, Ill.-based company was "extremely proud of our history as the custodian of the Vegemite brand for over 90 years, transforming it from its local roots into a global icon that's synonymous with Australia."
In a presentation about its acquisition, Bega said that the average Australian adult buys one jar of Vegemite each year, and it's found in more than 90% of Australian homes. In Australia, vegemite has a 14% market share in the overall spreads category and an 89% share in the yeast spread subsegment. A similar product, Marmite, which is more popular in the U.K., is owned by Unilever (UL) - Get Report .
Vegemite was developed in 1922 by the Fred Walker Co., which in 1926 became Kraft Walker Foods, a joint venture with Mondelez predecessor Kraft Foods, which fully acquired Vegemite in 1952.
The buyer said in a statement that it expects the "strongly EPS accretive" acquisition, in its first full year of operation, to generate revenues of A$310 million and Ebitda of A$40 million to A$45 million.
Sydney-listed Bega was until 2015 partially owned by New Zealand dairy cooperative Fonterra.
Bega will initially fund the purchase price with a A$500 million existing facility and said that it "has near-term corporate opportunities to pay down debt." The deal is expected to close in a few months.