American food manufacturer JM Smucker is set to acquire Hostess Brands, a US snack producer, for $5.6 billion (£4.5 billion).
JM Smucker, which manufacturers products for brands like Jif, Uncrustables and Dunkin’ Donuts, is expected to acquire Hostess Brands in the third quarter of the year to expand the company’s offering of brands and “accelerate its focus on convenient consumer occasions.”
Approximately 3,000 employees will join the company in conjunction with the transaction, as well as manufacturing facilities in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana; Arkadelphia, Arkansas and a distribution facility in Edgerton, Kansas.
Other American food brands such as Mondelez International (Oreo), General Mills (Cheerios) and PepsiCo reportedly showed interest in buying Hostess Brands, which had neared financial collapse in 2012 before being saved in 2013 by investment firms Metropoulos & Co. and Apollo Global Management.
Smucker has a stock market valuation of around $14 billion (£11.1 billion), and ended the 11th September trading day with shares 7% lower, while Hostess Brands shares were up more than 19%.
Focusing on convenient solutions
“We are excited to announce the acquisition of Hostess Brands, which represents a compelling expansion of our family of brands and a unique opportunity to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions,” said Mark Smucker, chair of the Board, president and CEO.
Andy Callahan, president and CEO of Hostess Brands commented: “I am extremely proud of the entire Hostess Brands team for the legacy they created in building a premier snacking company and driving industry leading returns for our investors. Today represents another exciting chapter for Hostess Brands as we combine our iconic snacking brands with The J.M. Smucker Co.’s family of beloved brands.
“We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders. Our companies share highly complementary go-to market strategies, and we are very similar in our core business principles and operations. Above all else, Hostess Brands and The J.M. Smucker Co. share a deep commitment to inspiring moments of joy and satisfaction through our products, and we look forward to continuing to do so as part of The J.M. Smucker Co. family.”