Kraft Heinz has agreed to sell its Planters peanuts and snacks business to Hormel Foods for $3.35bn as the maker of Heinz tomato ketchup seeks to shore up its balance sheet and boost growth.

The all-cash transaction follows the $3.2bn sale in September of parts of Kraft Heinz’s cheese business to the French group Lactalis, as the US company looks to exit divisions that are subject to commodity price fluctuations and dominated by private-label brands.

The sale of Planters, known for its more than 100-year-old top-hat wearing mascot Mr Peanut, follows an approach by Hormel — which owns Skippy peanut butter — to Kraft Heinz, according to people familiar with the situation.

It comes as Kraft Heinz’s chief executive Miguel Patricio seeks to turn round a debt-laden business, many of whose brands had been losing market share before Covid-19 as the group cut costs and struggled to keep pace with consumer trends.

The pandemic provided a boost to packaged and processed foods, however, as consumers confined to their homes turned back to comfort foods and familiar brands. That helped Kraft Heinz to report sales growth ahead of expectations for 2020 on Thursday: the figure came in at 6 per cent, measured on an organic basis.

“The pandemic brought us more consumption and brought more interest to our brands,” Patricio told the Financial Times. “We had very good results. So I think it helps a lot in the sense of giving us momentum as a company.”

Kraft Heinz — which is backed by Brazilian-US investment group 3G Capital and Warren Buffett’s Berkshire Hathaway — wants to hang on to that advantage by investing in products with renewed popularity, such as ketchup, sauces and macaroni cheese, children’s brand Lunchables and P3 protein packs.

It will use part of the proceeds of the Planters deal to expand its three main areas of focus — flavours, quick and easy meals, and snacking — along with helping to cut almost $25bn of net debt.

“The deal gives us the opportunity to explore other possibilities and have a more balanced portfolio,” said Patricio, a former executive at Anheuser-Busch InBev, who was recruited by 3G Capital in 2019 to help overhaul the company after it took a $15bn writedown and cut its dividend by one-third.

“Now we have the flexibility to choose the best opportunities for organic or inorganic growth, or even both.”

3G Capital, which is a long-term backer of its companies, known for keeping a tight control on costs, has recently shifted its focus and support towards developing a more sustainable growth strategy at Kraft Heinz, which also owns Jell-O and Kool-Aid.

Some 700 employees, most of them based at Planters’ three production sites, will move to Hormel as part of the transaction, which is expected to close in the first half of 2021. It includes most products sold under the Planters brand, such as nuts and trail mix, Cheez Balls and Corn Nuts.

The price amounts to about 15 times Planters’ earnings before interest, tax, depreciation and amortisation in 2020, according to a person familiar with the deal.

The Planters acquisition is the largest deal to date for Minnesota-based Hormel, the owner of Spam processed meat and Jennie-O turkey products. It bought Texas-based Sadler’s Smokehouse for $270m last year and has been looking to diversify beyond meats. It acquired the global peanut butter brand Skippy from Unilever for $700m in 2013.