U.S. allows Lactalis to buy Kraft's U.S. natural cheese business, with conditions

WASHINGTON (Reuters) - An American unit of Groupe Lactalis received U.S. antitrust approval to buy Kraft Heinz Co's U.S. natural cheese business on condition the companies divest Kraft Heinz's feta and ricotta businesses, the Justice Department said in a statement on Wednesday.

Kraft Heinz had announced in September 2020 it would sell its natural cheese business to the U.S. unit of the French-based dairy products company for $3.2 billion. It said it would retain Philadelphia Cream Cheese, Velveeta and Cheez Whiz in the United States.

The Justice Department said in a statement it would approve the deal on condition that the companies sell Kraft Heinz's Athenos and Polly-O businesses, which make feta and ricotta, respectively.

The divestiture was sought because Lactalis and Kraft Heinz are the two largest suppliers of feta and ricotta cheese to the U.S. market, the department said.

(Reporting by Diane Bartz; Editing by Peter Cooney)