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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 11, 2000 (February 7, 2000)
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Date of Report (Date of earliest event reported)
Bestfoods
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-4199 36-2385545
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
700 Sylvan Avenue
International Plaza
Englewood Cliffs, New Jersey 07632-9976
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(Address of Principal Executive Offices) (Zip Code)
(201) 894-4000
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Registrant's telephone number, including area code
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ITEM 5. OTHER EVENTS.
Reference is made to the press releases issued by Registrant on
February 7 and 8, 2000 filed herewith as Exhibits 1 and 2 describing the
Company's acquisition of Arisco Produtos Alimenticios S.A. Exhibits 1 and 2 are
incorporated by such reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit 1 Registrant's Press Release issued on February 7, 2000.
Exhibit 2 Registrant's Press Release issued on February 8, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 11, 2000 BESTFOODS
By:/s/ EDUARDO B. SANCHEZ
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Vice President, General Counsel
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EXHIBIT 1
BESTFOODS IN FINAL NEGOTIATIONS WITH BRAZILIAN FOOD COMPANY;
BESTFOODS' BRAZILIAN BUSINESS TO BE DOUBLED
ENGLEWOOD CLIFFS, NJ, February 7, 2000 -- Bestfoods is in the final stages
of negotiations concerning an investment in Arisco Produtos Alimenticios S.A., a
privately-held food company in Brazil with annual sales of $440 million.
Transactions associated with the negotiations are expected to be completed
within 24 hours and would make Bestfoods owners of the company.
Bestfoods' planned investment is approximately $490 million. Included on
the Arisco balance sheet is approximately $262 million of net debt.
Arisco, which is 80% owned by the founding family and 20% by Goldman Sachs,
includes primarily the flagship Arisco brand of soups, seasonings, bouillons,
mayonnaise, salad dressings, tomato products, ketchup, desserts, and other
products, as well as several strong regional brands, including Beira Alta and
Palmeiron. Arisco is the fifth largest selling food brand in Brazil.
C. R. Shoemate, chairman and chief executive officer of Bestfoods, said,
"Arisco is a true gem. This business, the largest privately-held food company in
Brazil, is one of the few major food companies to be offered in recent years in
the entire Latin American region. More important, it is growing strongly --
volumes have increased 13% compounded annually over the last three years -- and
it is highly compatible with Bestfoods' existing business in Brazil.
"The fit of Arisco's brands and products with Bestfoods' existing worldwide
core businesses is ideal. About 28% of the business is in savory products, which
complement Bestfoods' Knorr brand business, and 21% is in dressings and related
products. Arisco also has a foodservice business that fits very well with
Bestfoods' foodservice strategy and presents excellent opportunities to grow in
this core business area not only in Brazil, but also throughout the Mercosur.
About 11% of the Arisco business is in basic nutritious foods (starch products
used for preparing traditional mingaus and coladas, drinks, and other foods) --
a regional core for Bestfoods in Latin America.
"Bestfoods and Arisco together will be among the market leaders in numerous
core product categories. The combined range of products, including Bestfoods'
existing brands, such as Knorr bouillons, Hellmann's mayonnaise, Maizena corn
starch, and Mazola corn oil, together with Arisco's array of complementary
brands, will encompass premium branded foods as well as value-priced brands,
where Arisco competes very effectively.
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"Further, there are excellent synergies between our existing business and
Arisco's in production, purchasing, sales, distribution, and general and
administrative activities. Geographic fit is also excellent, with Arisco's
regional strengths in Brazil complementing our current positions. And the
addition of Arisco's excellent management team to ours will be yet another
benefit, allowing us to enhance our local execution of global strategies.
"And finally, in line with our acquisition and investment strategy
worldwide, we believe that the Arisco business will add quickly to Bestfoods'
growth. It will contribute to free cash flow and have a neutral impact on
earnings per share in the first year. We expect a positive earnings contribution
beginning in year two."
Commenting on Brazil's marketplace environment, Shoemate said, "When we
look at Brazil and our 70 years of experience there, we see 'growth' in capital
letters. We focus on the huge potential of this large market with its 160
million inhabitants; the nature of our products, which are affordable and fit
very well with local culinary habits; and Bestfoods' long and successful track
record in steadily growing volumes, sales, and profits. Arisco has excellent
market penetration in categories that are growing more than 10% annually in
aggregate. Its coverage of the value-priced segment of the market will give us
broader appeal among consumers, which is a meaningful advantage in a country
with the world's fifth largest population. By the same token, through its
enhanced Brazilian business, Bestfoods will bring the latest in innovation,
products, and food industry technology to the broad market, which includes a
high percentage of new, low-income consumers just entering the money economy.
"While it is true that Brazil is a challenging place in which to do
business, our local management experience and executional skills, together with
our well known brands, always serve us very well, whatever the difficulties of
the economy. Even with the 40% devaluation of the Brazilian Real last year, our
1999 margins were strong and earnings from Brazil were very satisfactory, even
though slightly lower than in 1998. In the local currency, our Brazilian
earnings grew 37%. We are now seeing economic improvements, which are driving
good volume increases. We expect solid profit growth for the full year 2000."
Bestfoods has been the most aggressive acquirer among U.S. food companies
in recent years, with 17 acquisitions worldwide since 1995. As Shoemate
explained, "Strategic investments in new businesses, along with development of
our existing core businesses and geographic expansion, is a key element of our
growth strategy. The Arisco addition would be the company's largest since we
purchased the Kraft baking business for $865 million in 1995. The integration of
that business with Bestfoods' existing baking business contributed to Bestfoods'
earnings in its first year and has produced nine consecutive quarters of
double-digit earnings growth since the third quarter, 1997. I believe that
Bestfoods has shown time and again that it knows how to pick growth-producing
businesses and can integrate them quickly and effectively. Arisco should add to
that long record of success."
The planned investment of approximately $490 million will come from
Bestfoods' available cash flow and borrowings from existing credit lines.
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To provide the clearest possible description of our business and outlook, this
report contains forward-looking statements based on our best current information
and reasonable assumptions about anticipated developments. Statements including
such words as "expects", "anticipates", "intends", "plans", "believes",
"estimates" and other similar expressions are intended to identify such
forward-looking statements. Because of the risks and uncertainties that always
exist in any operating environment or business, we cannot make assurances that
these expectations will prove correct. Actual results and developments may
differ materially depending upon currency values, competitive pricing,
consumption levels, costs and political and social conditions in the economies
and environments where Bestfoods operates.
ABOUT BESTFOODS: Bestfoods, formerly CPC International Inc., is among the
largest U.S. food companies, with sales of $8.6 billion in 1999. Best known
among Bestfoods' U.S. products are: Hellmann's and Best Foods mayonnaise and
dressings; Mazola corn oil and margarine; Skippy peanut butter; Knorr soups,
sauces, and bouillons; Entenmann's sweet baked products; Thomas' English
muffins; Arnold, Brownberry, Freihofer's, and Oroweat breads; Boboli pizza
crusts; Mueller's pasta; and Karo syrup. Bestfoods' global Knorr brand comprises
one of the world's most extensive lines of products. Bestfoods is one of the
nation's most international food companies, with operations in more than 60
countries and products marketed in 110 countries. For more information about
Bestfoods, visit the company's website on the Internet at:
http://www.bestfoods.com.
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EXHIBIT 2
BESTFOODS OWNS ARISCO, A LEADING BRAZILIAN FOOD COMPANY
ENGLEWOOD CLIFFS, NJ, February 8, 2000 -- Bestfoods now owns 100% of Arisco
Produtos Alimenticios S.A., a privately-held food company in Brazil. Through
transactions completed today, Bestfoods paid $490 million for Arisco, which has
debt of approximately $262 million.
Bestfoods announced yesterday that final negotiations were in progress
with Arisco and provided details about this latest addition to its worldwide
business.
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ABOUT BESTFOODS: Bestfoods, formerly CPC International Inc., is among the
largest U.S. food companies, with sales of $8.6 billion in 1999. Best known
among Bestfoods' U.S. products are: Hellmann's and Best Foods mayonnaise and
dressings; Mazola corn oil and margarine; Skippy peanut butter; Knorr soups,
sauces, and bouillons; Entenmann's sweet baked products; Thomas' English
muffins; Arnold, Brownberry, Freihofer's, and Oroweat breads; Boboli pizza
crusts; Mueller's pasta; and Karo syrup. Bestfoods' global Knorr brand comprises
one of the world's most extensive lines of products. Bestfoods is one of the
nation's most international food companies, with operations in more than 60
countries and products marketed in 110 countries. For more information about
Bestfoods, visit the company's Web site on the Internet at:
http://www.bestfoods.com.
