The deal, referred to as a "spin merge" transaction, will create a new Del Monte company, of which Heinz shareholders will own 74.5%. The move, and its tax-free implications, is similar to how Procter & Gamble Co. spun off its Jif and Crisco brands to J.M. Smucker Co. earlier this month.
Heinz Chairman-CEO William Johnson said in a statement the divestiture will allow Heinz to focus on its faster-growing food segments, including its eponymous ketchup brand, Boston Market frozen entrees and Anchor and Delimex frozen entrees.
Current Del Monte management will remain in place in the new company following the deal, expected to close around the end of 2002.
Northlich, Cincinnati, handles Starkist, while various agencies handle pet food assignments, including Brand Buzz, New York, a unit of WPP Group's Y&R Advertising, cat snacks; Interpublic Group of Cos.' Suissa Miller, Los Angeles, dog snacks; and Geppetto, New York, Scooby Snax.
Interpublic's McCann-Erickson Worldwide, San Francisco, handles Del Monte brands.