NETHERLANDS – Lamb Weston Holdings, Inc. an American food processing company, has agreed to acquire the remaining equity interests in its European joint venture with Meijer Frozen Foods B.V. in the Netherlands for EUR700m (US$687.9m).
The transaction expected to close in the second half of Lamb Weston’s current 2023 fiscal year and subject to regulatory approval, will see the Idaho-based company acquire the 50% shares in Lamb Weston-Meijer held by the Dutch group.
Lamb Weston Meijer V.o.f. founded in 1994, produces and markets high-quality frozen potato products and appetizers, as well as dehydrated potato flakes.
One of the world’s largest producers and processors of frozen French fries, waffle fries, and other frozen potato products plans to pay €525 million (US$511.26m) in cash and €175 million (US$170.42m) in common stock.
The transaction will see Lamb Weston adding five manufacturing facilities to its operations, including four in the Netherlands and one in the United Kingdom.
It also includes a sixth manufacturing facility through a 75% interest in a joint venture in Austria. These facilities produce nearly two billion pounds (910,000 MT) of finished frozen products annually.
Tom Werner, Lamb Weston’s president, and CEO said: “Lamb-Weston-Meijer was built over the last 28 years, and we’re grateful to Meijer Frozen Foods for their longstanding partnership. The joint venture has served as a strong platform to drive growth in Europe and the Middle East, as well as to support our global customer base across our key international markets.”
This transaction firmly aligns with Lamb Weston’s long-term capital allocation and acquisition framework, and we believe it will strengthen our manufacturing footprint by leveraging a truly global supply chain to better serve our customers and position us to take advantage of growth opportunities in Europe, the Middle East, and Africa.”
In the first quarter that ran to 28 August, the New York-listed company reported group-wide sales of US$1.2bn, up 14%.
The company expects its FY23 sales to rise to around US$4.7 billion – US$4.8 billion, against the consensus of US$4.77 billion, while Lamb-Weston-Meijer hopes to generate around EUR954m in sales in fiscal 2022, including EUR114m from its exited joint venture in Russia, according to a statement.
In July, Lamb Weston said it had written off US$62.7m, a portion of its Lamb-Weston/Meijer business in Russia that operated a manufacturing facility in Lipetsk that sourced from and supplied to the local market.
The decision followed its previous announcement that it would halt all exports to Russia and stop all further investments in the country.
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