Pillsbury, Basic American Enter into Agreement

The Pillsbury Co. (Minneapolis) and Basic American Foods (Walnut Creek, CA), a manufacturer of dehydrated potato products, will enter into an agreement calling for the sale of Pillsbury's Shelley, ID plant and potato foodservice business to Basic American Foods. In addition, Basic American Foods will become the long-term supplier of Pillsbury's retail dehydrated potatoes that are processed from the Shelley plant.

Terms of the agreement were not disclosed. The sale of the Shelley plant and foodservice business to Basic American Foods is in line with Pillsbury's focus on core brands and technologies, company officials said.

Pillsbury Bakeries & Foodservice business emphasizes bakery and dough-related products. Pillsbury commented that its largely non-branded dehydrated foodservice business in potatoes is non-strategic, and that terms of the proposed sale would support its retail potato business. The company will continue to sell retail potato brands.

Under the proposed agreement, contractual agreements between Pillsbury and its dehydrated potato customers are to be transitioned to Basic American Foods when the sale is finalized. No other businesses of Pillsbury Bakeries & Foodservice will be affected by the transaction. Basic American Foods plans to continue operating the Shelley plant, and to make the transition for employees, suppliers, and customers when the sale is finalized.