Upon completion of the sale to the Arnott’s Group, Freedom Foods will undergo a name change in an effort to turn a new leaf and avoid confusion between it and the cereals.
This comes after accounting problems inside Freedom Foods led to a trading suspension and dramatic write-downs of its annual accounts.
Manufacturing facilities in Leeton, Darlington Point and Dandenong will be affected by the $20 million sale.
Arnott’s Group chief executive George Zoghbi said the company was excited to acquire new capabilities in snacks and allergen-free products.
“This will add three Australian manufacturing sites to our already well-invested domestic supply chain,” Mr Zoghbi said.
“Once the purchase is finalised our domestic manufacturing network will extend across eastern Australia from Virginia in Queensland, Huntingwood, Leeton and Darlington Point in NSW to Shepparton and Dandenong in Victoria and Marleston in South Australia.”
The Freedom Foods site in Shepparton will not be affected by the sale.
The site is involved in the dairy arm of Freedom Foods — an operation the group wants to hold onto most, alongside its nutritional products.
Once costs of the sale and equipment leases are deducted, Freedom Foods will net $11 million in cash from the sale — which rehomes brands such as Freedom Foods muesli bars, Messy Monkeys, Heritage Mill, Arnold’s Farm and Barley+.
Most employees are expected to be transferred in the sale, but some redundancies are expected.
Freedom Goods Group interim chief executive Michael Perich said the group considered the iconic Arnott’s Group a “complementary owner” for the cereals and snacks.
“We believe the cereal and snacks businesses will thrive under an owner such as the Arnott’s Group, which is committed to investing in the business and employees to ensure a sustainable and successful future,” Mr Perich said.
In early December it was understood the cereal and seafood aspects of the group were due to be sold in an effort to raise up to $280 million to recapitalise the business.
“Freedom Foods needs to become a simpler business — and that includes identifying parts of our business that may perform better under different ownership,” Mr Perich said at the time.
The transaction is expected to be completed on March 1, 2021.
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