Strauss Group (TSE: STRS) announced that it will sell its 50% stake in Sabra Dipping Co. and PepsiCo-Strauss Fresh Dips & Spreads International GmbH (Obela) for $243.8 million.
In 2005, Strauss acquired 51% of Sabra for $9 million, and in 2008 PepsiCo bought the remaining shares and formed a joint venture with PepsiCo, in which they each owned 50%. Since that time, Sabra has become the largest company in the United States of America and the leader in the chickpea market. The company subsequently expanded outside the United States with the Obela brand.
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In addition, Strauss will receive an option to purchase a 2.5% stake in PepsiCo’s salty snack operations in Israel.
The Sabra sale reflects Strauss’ continued strategy for the 2024-2026 period to focus on its core activities. This latest strategy includes strengthening its main base in Israel, expanding its operations in Brazil, and continuing to grow its water activities around the world, while continuing to invest in developing its capabilities and enhancing its flexibility and readiness for the future.
Sabra operates refrigerated fresh dips, salads and spreads in the United States and Canada while Opella operates in Australia, New Zealand and Mexico with a focus on hummus and guacamole. Sabra is the top brand in dips and spreads in the US in terms of sales and market share, according to IRI data, while in terms of chickpeas it has the largest market share in the US.
Sabra & Obella has 700 employees (as of the end of 2023) and a state-of-the-art production plant in Virginia.
Shai Babad, CEO of Strauss, said: “This step constitutes another pillar in the implementation of the group’s strategy, which aims to focus on the core business, utilize our resources in the best possible way, and lead important business moves for Strauss. We thank all the patience of employees from all generations.” “And PepsiCo’s extraordinary journey from small salad company to the leader in the US hummus market.”
Strauss estimates it will record a net capital gain of between NIS 319-325 million from the deal in its 2024 financial results.
Published by Globes, Israel Business News – en.globes.co.il – on November 22, 2024.
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