Richardson inks deal for Wesson cooking oil

Hey there, time traveller!
This article was published 18/12/2018 (2846 days ago), so information in it may no longer be current.

Richardson International Ltd. announced an agreement with Conagra Brands Inc. to purchase its well-known Wesson cooking oil brand, including a large production facility in Memphis, Tenn.

Wesson is the largest vegetable oil brand in the U.S., with about 11.5 per cent of the U.S. market for canola, soy and blended vegetable oil products.

Richardson is already the largest agribusiness company in Canada. When the deal is completed sometime during the first quarter of 2019, the 280,000-square-foot Memphis production facility will become the largest of the privately held Winnipeg company’s current holdings.

The company said the acquisition reinforces the growth strategy for its food business and complements its position as a vertically integrated canola processor.

Curt Vossen, president and CEO of Richardson International, said it is an exciting deal for his company and for the city of Winnipeg.

“We are from gate to plate, so to speak, in Canada,” he said. “This extends that reach into the biggest consumptive market in the world for products like canola oil and other oils. This basically supports the biggest retail oil brand in the U.S.”

The Memphis facility processes about 150,000 tonnes of product per year, more than twice the output of Richardson’s Lethbridge, Alta., facility, which was one of the first in the world to market canola oil.

While the Wesson brand is not available in Canada, it is larger in the U.S. than brands such as Mazola or Crisco. As a private company, Richardson is not legally obliged to disclose the purchase price. Vossen said Conagra has chosen to withhold the price until its next analyst call.

Richardson is already the largest handler of canola in Canada with about 30 per cent of the market. Vossen said the Wesson acquisition will provide more pull into a much bigger market in the U.S.

“It will give us and our customers some optionality,” he said. “We will continue to move Canadian agricultural production as we have been doing. Now we will be able to do it on larger scale, right from the farm, through our processing and into a packaged form that will go all over the U.S.”

Richardson is currently in the process of building a $30-million research and innovation centre in downtown Winnipeg, focused on product development.

The Wesson agreement is subject to the usual closing conditions, including regulatory approval, and is expected to be finalized in the first quarter.

The deal comes nine months after the U.S. Federal Trade Commission moved to block the proposed US$285-million acquisition of Wesson by J.M. Smucker Co. over concerns the combination would lessen competition. Smucker had planned to move production to its facility in Ohio.

— with files from The Canadian Press

martin.cash@freepress.mb.ca