Premier Foods, the maker of Branston pickle, Oxo and Hovis, has been trying to sell the division since June.
Brookes Avana makes own-label chilled foods, cakes and pudding and was a key supplier to Marks & Spencer. The business recently lost a key £30m contract with Marks & Spencer, which hit its bottom line.
The sale helps Premier Foods chief executive Michael Clarke's strategy of streamlining the business and focussing on eight 'Power Brands' – Hovis, Mr Kipling, Ambrosia, Sharwoods, Oxo, Loyd Grossman, Bisto, and Batchelors.
Clarke said: "Brookes Avana will have a better opportunity to grow with two Sisters Food Group, given their focus in the chilled foods sector."
The Brookes Avana business employs around 2,000 people. Premier Foods said that "it is intended that all the employees will transfer with the business".
Premier Foods said it will use the money to pay down bank debt, which stood at £1.27bn in November. Disposal costs are estimated to be around £1.8m.
At the half-year ending 25 June 2011, Brookes Avana reported a trading loss of £13.3m.
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