"The acquisition of Minute Rice opens the doors to the Canadian rice market, where our group did not have any branded business," Ebro Puleva stated in a press release.
Retailer power and shrinking margins in Western Europe is pushing many food manufacturers to diversify their operations, consolidate, restructure around profitable divisions.
The transaction is valued at about €219m ($280m) and will be closed once the necessary approval has been obtained from US anti-trust regulators.
Ebro Puleva claims to be the world leader in the rice sector, and the number two pasta manufacturer. It is also among the leading Spanish sugar manufacturers and is among the top companies on the Spanish dairy products market.
Minute Rice is second in branded, retail rice sales in Canada and fifth in the US. The Kraft unit posted a turnover of about €70.5m ($90m) in 2005, with an operating profit of about (€29m) $37m.
Ebro Puleva said the incorporation of Minute Rice into the group, following the recent acquisition of New World Pasta, gives its US business a major role within the group. About 28 per cent of the total consolidated operating profit and 20 per cent of total turnover would come from the US once the sale is completed.
The acquisition of Minute Rice is part of the company's four-year restructuring programme, which began this year. The company aims to increase its branded business and strengthen its position in geographical markets of "greatest interest" for the group.
The purchase consolidates the group's already strong position on the Canadian food market and opens the doors to a new segment, the rice market.
The acquisition of Minute Rice also pushes Ebro Puleva up the ranking of US food companies, putting it among the top fifteen, the company stated.
Ebro Puleva owns brand names such as Panzani, Ronzoni, Saint Giorgio, Catelli and Lancia in pasta and sauces.
The company reported a net profit of €68m in the first half of 2006, a year-on-year growth of 42 per cent. The net turnover rose 22 per cent over the same period to €1,254m.
Operating profit grew by 12.3 per cent to €136m. The group acquired New World Pasta last June.