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Heinz acquires Beech-Nut
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February 28, 2000: 3:25 p.m. ET
Heinz becomes No. 2 baby food maker behind Gerber; terms not disclosed
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NEW YORK (CNNfn) - Ketchup-maker H.J. Heinz Co. agreed Monday to acquire privately owned Milnot Holding Corp. of St. Louis, maker of Beech-Nut, the number two U.S. baby food.
Terms weren't disclosed.
But Pittsburgh, Pa.-based Heinz, which has more than $9 billion in annual sales and also owns Nine Lives cat food, Starkist tuna and Ore-Ida frozen foods, said adding the Beech-Nut brand will bump its own baby food line up to number 2 from number 3 behind Gerber, the top-selling U.S. brand.
Combined, Heinz and Beech-Nut will have 24 percent of the U.S. baby food market, with Gerber holding on to 73 percent, according to Heinz. Milnot President Scott Meader said his company sells about $150 million in Beech-Nut baby food a year.
"Although we will still be a distant second to Gerber (GCW: Research, Estimates), a combination of Heinz and Beech-Nut will provide the critical mass to make the U.S. baby food market more competitive, innovative and dynamic," Heinz President and CEO William R. Johnson said.
Heinz (HNZ: Research, Estimates) also believes acquiring Milnot, which is owned by the Chicago-based private equity firm Madison Dearborn Partners Inc., and also produces condensed milk and Chili Man canned chili, will help bolster international baby food sales, particularly in Britain and Italy, the company said.
Heinz shares were down 7/16 to 32-1/4 Monday afternoon. Gerber shares were down 3/16 to 4-5/16. 
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