Bell Food Group has announced that it will sell its German sausage business to the Zur Mühlen Group.
The move will help the company to grow its business in German and international air-dried ham products.
As a part of the deal, the Zur Mühlen Group will take over the sausage manufacturing plants in Suhl and Börger.
The two plants employ around 400 people, who will be absorbed by the Zur Mühlen Group.
However, some changes will be implemented in the administrative and central services department of the sausage business.
The company will initiate a social compensation plan with the employee representatives in good time and respect the statutory participation rights in full.
Increase In Price
The price of pork has risen sharply but it did not translate into an increase in the price of sausages due to a drop in demand for meat and sausages in Germany.
The transaction is subject to the approval of the competition authorities.
The parties have not disclosed other details of the transaction.
Impact Of The Sale
The sale of the sausage business will reduce net revenue of Bell Food Group by around CHF 85 million.
It will have a positive impact on the company’s cash flow and EBIT by CHF 10 million per year from 2020.
The dependence on fluctuations in the prices of raw materials will also decrease.
The sale will incur mostly non-cash one-off costs of around CHF 35 million in the 2019 financial year, the company said.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
