Vlasic to Sell Pickle Business to Heinz

Vlasic Foods International Inc. filed for bankruptcy protection and agreed to sell its core pickle business and Open Pit barbecue sauce line to leading global food maker H.J. Heinz Co. in a court-supervised auction for $195 million. The deal is expected to help debt-laden Vlasic, based in Cherry Hill, N.J., emerge from bankruptcy protection. Vlasic, which was spun off from Campbell Soup Co. about three years ago, is also expected to sell its Swanson frozen dinners business, analysts said. That would leave Vlasic with no U.S. brands but with frozen food and canned vegetable units in Britain. Vlasic’s creditors could reject Heinz’s offer, hoping for a higher or better offer, but the agreement with Heinz probably has provisions that would deter competing bids. Pittsburgh-based Heinz, which is best-known for its ketchup, may have better cost controls than Vlasic, which could help financial performance in the businesses, said Jaine Mehring, food industry analyst at Salomon Smith Barney. Vlasic pickles are the top-selling pickles in the U.S., the company said. Heinz shares rose 33 cents to close at $43.95, and Vlasic shares closed unchanged at 63 cents, both on the New York Stock Exchange.