Kraft Heinz Co. is in discussions with Sydney-based Freshfood Services Pty. Ltd. regarding the sale of the U.S. packaged food producer's Australian instant coffee business, The Australian Financial Review reported March 25, citing sources.
The business became part of Kraft Heinz when the company acquired Cerebos Pacific Ltd.'s food and instant coffee business from Japan's Suntory Beverage & Food Ltd. for A$290 million in 2017. The newspaper said Kraft Heinz's management quickly identified the coffee business as an orphan and noncore asset.
Meanwhile, Freshfood Services, which manufactures and sells coffee in Australia, is said to be bidding for Kraft Heinz's local instant coffee unit, including the Mocopan Coffee brands, the report said.
In 1998, the company, which owns the House of Robert Timms coffee brand, acquired coffee brands from The Unilever Group. The acquisition included the Bushells Coffee brand and its New Zealand division, while its tea brand remained with the consumer goods giant.
The news comes a month after Kraft Heinz was reported to be exploring strategic options for its Maxwell House coffee brand, including a potential sale that could be worth $3 billion.
The newspaper did not disclose the potential transaction value for Kraft Heinz's Australian instant coffee business, but sources told the newspaper that the unit records about A$40 million in annual revenue and A$5 million in earnings before interest, tax, depreciation and amortization.
A representative for Kraft Heinz told S&P Global Market Intelligence in an emailed statement that the company does not comment on rumors or speculations. FreshFood Services and its parent, Freshfood Australia Holdings Pty Ltd, could not be reached for comment.