The Del Monte Merger
IN JUNE 2002, HEINZ ANNOUNCED THAT IT WOULD SPIN OFF AND THEN MERGE ITS SLOWER-SELLING PRODUCTS WITH DEL MONTE FOODS, INC., IN AN EFFORT TO SIMPLIFY ITS BUSINESS. AFTER POSITIVE VOTES BY BOTH HEINZ AND DEL MONTE SHAREHOLDERS AND APPROVAL BY THE IRS, THE TRANSACTION, COMPLETED ON DECEMBER 21, 2002, GAVE HEINZ SHAREHOLDERS APPROXIMATELY 75% OF THE NEW, MUCH LARGER DEL MONTE. THE PRODUCT LINES/SEGMENTS SHIFTED TO DEL MONTE INCLUDED HEINZ’S U.S. AND CANADIAN PET FOOD AND PET SNACKS BUSINESSES; U.S. TUNA; U.S. PRIVATE-LABEL SOUPS AND GRAVIES, AS WELL AS COLLEGE INN SOUPS; AND U.S. INFANT FEEDING. THE AFFECTED BRANDS INCLUDED STARKIST, 9 LIVES, KIBBLES ‘N BITS, NATURE’S GOODNESS BABY FOOD, AND COLLEGE INN SOUPS. THE MERGER WAS EXPECTED TO REDUCE HEINZ’S ANNUAL REVENUE BY APPROXIMATELY 20%, OR $1.8 BILLION, WHILE DOUBLING DEL MONTE’S SIZE.