Talk about a sweet deal!
Jelly giant J.M. Smucker has agreed to buy Hostess Brands in a sale worth a reported $5.6 billion, or $34.25 a share, in the latest food company acquisition, according to a press release.
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The move from Smucker comes weeks after several other company acquisitions. Earlier this summer, Campbell’s Soup purchased Rao’s pasta sauce owner Sovos Brands for $2.7 billion, and M&M’s owner Mars bought Kevin’s Natural Foods.
"With this acquisition, we are adding an iconic sweet snacking platform; enhancing our ability to deliver brands consumers love and convenient solutions they desire; and leveraging the attributes Hostess Brands offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organization and consistent retail execution across channels to drive continued growth," Mark Smucker, Chair of the Board, President and Chief Executive Officer, said in the release.
Now, Hostess shareholders will receive $30 in cash and 0.03002 shares of Smucker’s stock for each share of Hostess they own.
Smucker has also agreed to assume the debt that Hostess had, with the deal expected to close in Smucker’s fiscal third quarter, which comes to a close in January.
The move comes as Hostess saw demand for its product slip after it raised prices to fight higher commodity costs. The lack of demand resulted in concern among investors, which was compounded by the takeover interest from rivals.
The sale now ends Hostess’s seven-year run as an independent, publicly traded company.
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