The American French fries giant Lamb Weston buys out Meijer Frozen Foods from the joint company Lamb-Weston/Meijer. With this, the French fries group, which has four production locations in the Netherlands, comes completely into American hands. The Meijer family is touching hundreds of millions for the 50% interest in the joint venture. The two sides have worked together for 28 years.
Lamb Weston announced the agreement today (Thursday, October 20) in a Verkaring. Lamb Weston transfers €525 million to the bank account of Meijer Frozen Foods and €175 million in the form of ordinary shares of Lamb Weston. The American group expects to complete the deal in the second half of fiscal year 2023, subject to antitrust approval. Tom Werner, president and CEO of Lamb Weston, said in a statement that he is grateful for the long-term partnership with Meijer. “The joint venture has served as a strong platform to drive growth in Europe and the Middle East and to support our global customer base in our key international markets.”
Be able to respond better to growth opportunities
According to Werner, the acquisition fits in with Lamb Weston's strategy to optimize capital return (capital allocation) and to make more efficient use of the international supply chain. The chip group also believes it can better respond to the growth opportunities it sees in Europe, the Middle East and Africa. These are the markets in which Lamb-Weston/Meijer is currently active. Lamb-Weston/Meijer achieved a net turnover of approximately €2022 million for the 954 financial year. This includes €114 million from the company's former joint venture in Russia). The current joint venture has four production locations in the Netherlands (Kruiningen, Bergen op Zoom, Oosterbierum and Broekhuizenvorst), one in the United Kingdom and one in Austria (75% interest in the factory in Hollabrunn). These factories produce almost 910.000 tons of frozen finished products annually. The approximately 1.500 employees of Lamb-Weston/Meijer will all join Lamb Weston after the transaction, the American group explains.
“We are proud of the company we have built together to create a market leader in Europe,” said Kees Meijer, CEO of Meijer Frozen Foods, in the statement. “We remain confident in the long-term prospects for Lamb Weston and the global frozen potato category. By maintaining an investment in Lamb Weston common stock after the transaction closes, we maintain our strong belief in a bright future for the company.”