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UPDATE 1-Oreo maker Mondelez to sell Vegemite brand to Bega Cheese

Published 19/01/2017, 10:14 am
UPDATE 1-Oreo maker Mondelez to sell Vegemite brand to Bega Cheese
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(Adds details, background, shares)

Jan 18 (Reuters) - Mondelez International Inc MDLZ.O said on Wednesday it will sell most of its grocery business in Australia and New Zealand, including the popular Vegemite food spread brand, to Bega Cheese Ltd BGA.AX for A$460 million ($345.28 million).

Shares of Mondelez were up about 1 percent at $45.49 after the bell. Bega shares were up 10.3 percent at A$4.94 in early trading on the Australian Securities Exchange.

Mondelez said it was selling most of its grocery business to focus on core brands such as Oreo cookies and Cadbury chocolates. The company has been divesting a few of its small brands and production facilities in other countries to focus on its mainstay brands.

Mondelez said it will also sell its ZoOsh, Bonox brands and other products that use the Kraft brand under license, to Bega Cheese under the agreement. dairy producer Bega will own Mondelez's Port Melbourne manufacturing facility and also receive a license to use the Dairylea brand in Australia and New Zealand under the deal.

Mondelez said the deal is expected to close in the coming months.

The Oreo maker recently said it was selectively raising prices across its brands, as it grapples with higher commodity costs and a weaker British pound. ($1 = A$1.33)

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