Kagome Co., Japan's largest manufacturer of processed tomato foodstuffs, said Thursday it will buy a controlling stake in Heinz Japan Ltd., the Japanese unit of H.J. Heinz Co. of the United States, next February to make it a joint venture with the U.S. food giant.
The deal is part of a strategic alliance Kagome formed with Heinz in July, in which the two firms are to cooperate in boosting operations and earnings in the global market, Kagome said.
The proposed Japanese joint venture will enable the two firms to promote their functional integration, improve management efficiency and maximize earnings, Kagome added.
Under the deal, Kagome will pay 9.77 billion yen to buy 518,556 shares in Heinz Japan from the parent firm and 450,907 new shares to be issued by Heinz Japan, giving Kagome a 51 percent stake. The remaining stake will be held by Heinz.
The share transaction will take place on Feb. 1, 2002.
Meanwhile, Heinz is expected to take a 5 percent stake in Kagome with the purchase of new shares to be issued by the Japanese firm by Jan. 31, 2002, in accordance with their strategic alliance, Kagome said.
Heinz Japan, established in 1961, posted sales of 21.1 billion yen in the fiscal year ended April 30 this year.