Unilever closes sale of Skippy peanut butter unit in China

Unilever has completed the sale of its Skippy peanut butter unit in China to US-based Hormel Foods, following the receipt of regulatory approvals in the country.

This development comes after the sale of the remaining global Skippy business to Hormel on 31 January 2013.

The two companies inked a deal under which the US firm agreed to take over Skippy for a cash consideration of approximately $700m, as part of the latter’s efforts to expand its lunchtime offerings in the US and accelerate growth in China.

The deal included Skippy manufacturing facilities in Little Rock, Arkansas, US and Weifang, China.

At the time of signing the deal, Hormel Foods chairman of the board, president and CEO Jeffrey M. Ettinger said that the acquisition of the Skippy business would be a significant opportunity for the company.

"It allows us to grow our branded presence in the centre of the store with a non-meat protein product and it reinforces our balanced portfolio," Ettinger added.

Introduced in 1932, Skippy is one of the major brands in the fast-growing subcategory of natural peanut butter. Peanut butter is a $2bn category with a 74% household penetration.

Globally, the brand is sold in more than 30 other countries on five continents.

Unilever has been positioning itself more as a personal care company than a food company and has divested various brands in recent years.

In October this year, it sold its Wish-Bone and Western dressings brands to Pinnacle Foods for $575m.

In July, the company closed the sale of its oils and fats business in Turkey to Swedish-Danish firm AarhusKarlshamn (AAK).