JM Smucker to Acquire Hostess Brands in a $5.6 Billion Deal
Rival food giant JM Smucker is set to acquire classic US snack maker Hostess Brands in a $5.6 billion deal. Smucker’s chief executive, Mark Smucker, expressed excitement about adding an “iconic sweet snacking platform” through the acquisition. Shares of both companies reacted to the news, with Hostess Brands’ shares soaring.
Hostess Brands, known for iconic treats like Twinkies, Donettes, and Ho Hos, has been the subject of interest from major food brands such as PepsiCo, Mondelez International (the maker of Oreo), and General Mills (the producer of Cheerios).
The deal is expected to close in the third quarter of Smucker’s current financial year. Hostess Brands, headquartered in Lenexa, Kansas, produces a range of beloved household brands, including Ding Dongs, Zingers, and Voortman cookies and wafers. The company, with approximately 3,000 employees, has a history dating back more than a century, beginning with the sale of the first Hostess Cupcake.
Hostess filed for bankruptcy in 2012 after failed negotiations with its workers’ union rendered it financially unsustainable. It was rescued from bankruptcy in 2013 by investment firms Apollo Global Management and Metropoulos & Co. After nearly collapsing, Hostess Brands returned to the stock market in 2017 and is now listed on the Nasdaq trading platform in New York.
JM Smucker, headquartered in Ohio, is known for its fruit preserves and Jif peanut butter, among other brands. The company has a market valuation of approximately $14 billion.
This acquisition is the latest significant takeover in the US food manufacturing industry this year. Campbell’s Soup recently announced its purchase of Sovos Brands, the owner of Rao’s pasta sauce, for $2.7 billion. Prior to that, Mars, the owner of M&M’s, acquired Kevin’s Natural Foods, while Unilever, a consumer goods giant, bought frozen yoghurt brand Yasso in June.
Hostess Brands’ shares saw an increase of over 19% by the end of the trading day, while JM Smucker’s shares closed 7% lower.
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