Kraft Heinz exploring sale of Oscar Mayer brand that could be worth up to $5 billion: Wall Street Journal

By Ciara Linnane

Company has hired financial advisers to help review a sale of the cold-meats brand

Kraft Heinz Co. has hired financial advisers to help explore a possible sale of its Oscar Mayer unit, which makes hot dogs, cold cuts and bacon, the Wall Street Journal reported Monday, citing people familiar with the matter.

The business could be worth $3 billion to $5 billion, the people said. The company has hired Bank of America (BAC) and Centerview Partners to work on the process, with potential buyers including private-equity firms or other food companies.

Kraft (KHC) - which has a new chief executive in Carlos Abrams-Rivera, who took on the role on Jan. 1 - is working to overhaul its portfolio as consumers become more health- and budget-conscious.

Abrams-Rivera is also under pressure to boost the company's stock price, which has been little changed for the last five years.

The company is seeking to make supermarket staples like its ketchup and fruit drinks more nutritious amid a pushback on processed foods and as increasing levels of obesity and other chronic illnesses are linked to diet.

The parent to brands including Lunchables, Maxwell House, Jell-O and Velveeta announced Abrams-Rivera as CEO last summer. He had previously run its North America operations.

The company posted first-quarter earnings on May 1 that only matched profit expectations and fell shy on sales again. Sales declined as prices increased at the lowest rate since the third quarter of 2021, while volume and mix declined at the lowest rate since the second quarter of 2022.

The stock was up 0.6% Monday but is down 1.4% in the year to date, while the S&P 500 SPX has gained 9.5%.

-Ciara Linnane

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05-13-24 1346ET

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