OAN’s James Meyers
1:42 PM – Monday, September 11, 2023
Jelly Maker J.M. Smucker announced on Monday that they are buying Hostess Brands for a whopping $5.6 billion, including their ongoing debt, which equates to $34.25 a share.
The deal is worth close to $4.6 billion, excluding debt, with Smucker paying Hostess shareholders around $34.25 per share.
The deal is expected to close in January of next year, which is the end of Smucker’s fiscal third quarter.
Hostess has gone through bankruptcy twice in the past two decades, which was exacerbated when Twinkies were not on store shelves for several months.
During the deal, Smucker reportedly had to fight off rival companies like PepsiCo, Oreo Maker Mondelez International, and General Mills in order to get Hostess.
The newest deal is one of many recently by Big Food companies, which includes Campbell’s Soup’s $2.7 billion acquisition of Sovos Bands. Unilever bought frozen yogurt brand Yass in June and M&M’s owner, Mars, Inc., bought Kevin’s Natural Foods back in July.
After the announcement of the new deal, Hostess’ shares rose 18% in pre-market trading on Monday and Smuckers stock dropped 7.5%.
Over the past couple of years, Hostess has seen a dip in consumer demands for its Twinkies and Ding Dong food products after raising prices to combat inflation, which resulted in higher interest for takeover from larger rival companies.
The acquisition by Smuckers also ends Hostess’s seven-year run as an independent, publicly-traded company. In 2016, Hostess reportedly went public through a merger with a special purpose acquisition company.
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