Heinz is today expected to confirm that it has bought the maker of HP sauces for £470 million.
In a surprise development, the company is said to have beaten off competition from UK rivals Premier Foods and Associated British Foods to land HP Foods, which produces its famous brown source at its factory in Aston, Birmingham.
The group also makes sauces under the Lea & Perrins brand in Worcester.
HP Foods is being sold by French group Danone via an auction managed by investment bank Lazard. Danone is looking to concentrate on its three core businesses.
A source close to the deal yesterday said that an announcement could be made later today.
Bidding has taken place at a busy time for the food production industry, with Premier snapping up the maker of Quorn for £172 million from private equity firm Montagu earlier this month.
Quorn will be Premier's largest brand, joining labels such as Ambrosia custard, Branston Pickle, HP Beans and Typhoo Tea.
AB Foods has also been eager to expand, buying Mazola cooking oil and Ovaltine in 2002 and then two food ingredients businesses from Australia's Burns, Philp & Co for £717 million
It owns brands such as Ovaltine and Twinings but in recent months has focused on expanding its discount clothing chain Primark.
However, analysts have said that the HP brand would make a good fit for AB Foods, which has previously declared its intention to expand in the food business through acquisition.
The spotlight also fell on the sector last week when RHM - the maker of Mr Kipling cakes and Paxo stuffing - announced plans to float on the London market. Analysts expect it to be valued at up to £1.3 billion plus £700 million of debt.
According to reports, Heinz is expected to maintain investment in advertising and new HP products following its decision to focus on ketchup, condiments and sauces.
Last month it unveiled plans to dispose of a number of its weaker European businesses.
Danone bought HP Foods from industrial conglomerate Hanson for £199 million in
1988. Since then the company has prospered from heavy investment in areas such as advertising and the launch of a number of new products.
Analysts say the HP business makes annual after-tax profits of around £31 million and, with a multiple in line with recent sector deals, would have a price tag of around £430 million to £450 million.
Also up for sale in the HP grouping are its Amoy noodlebased meals and soy sauce range, Daddies ketchup and Rajah Indian herbs and spices range as well as HP sauces and Lea & Perrins worcestershire sauce.
The group includes three plants in the UK and one in the United States.