Goodman Fielder, the biggest food company in Australia and New Zealand, agreed to sell its Biscuits unit to Green's Food Holdings for about A$17 million and will take an impairment of more than three times that amount against the business.
The sale is part of the Sydney-based company's ongoing strategy to focus on profitable, market-leading categories and brands which has allowed it to return to profit and reduce debt. It will record a non-cash impairment charge of A$50 million to A$55 million against the biscuits business in the first half of 2014.
Green's will get the Paradise, Cottage, Vive and Veri Deli brands and have a short-term licence to use the White Wings brand for biscuits. Green's makes food products ranging from cake mixes to breakfast cereals and savoury biscuits under the Green's, Lowan, Poppin, Waterthins and Roccas Deli brands.
"It allows us to concentrate our internal resources and investment on our core brands within the grocery division, where we have profitable, category-leading positions including spreads, flour and cake mix and dressings and mayonnaise," said chief executive Chris Delaney, in a statement.
The transaction is expected to be completed by the end of February, it said. Net proceeds would be used to repay debt.
The shares last traded at 70 cents on the NZX and have declined 14 per cent this year.