(US) – Classic US snack maker Hostess Brands is set to be acquired by rival food giant JM Smucker in a deal worth $5.6 billion (£4.5 billion).
Mark Smucker, CEO of Smucker, expressed enthusiasm about the acquisition, stating, “With this acquisition, we are adding an iconic sweet snacking platform… to drive continued growth.”
Hostess Brands, known for its beloved snack brands like Twinkies, Donettes, and Ho Hos, saw a surge in its stock price following the announcement of the acquisition.
On the other hand, JM Smucker is renowned for its fruit preserves and Jif peanut butter, making this acquisition a strategic move to diversify its product portfolio.
Hostess stock soars
Reportedly, several major players in the American food industry, including PepsiCo, Mondelez International (maker of Oreo), and General Mills (maker of Cheerios), had shown interest in acquiring Hostess.
The deal is expected to be finalized in the third quarter of Smucker’s current financial year.
Hostess, headquartered in Lenexa, Kansas, boasts a lineup of iconic household brands like Ding Dongs, Zingers, and Voortman cookies and wafers. Its history dates back over a century to the sale of the first Hostess CupCake.
In 2012, Hostess faced financial turmoil and filed for bankruptcy after failed negotiations with its workers’ union. It was subsequently rescued from bankruptcy in 2013 by investment firms Apollo Global Management and Metropoulos & Co.
After nearly collapsing, Hostess Brands made a triumphant return to the stock market four years later and is currently listed on the Nasdaq trading platform in New York.
JM Smucker, headquartered in Ohio, possesses a diversified portfolio that includes jams, jellies, coffee, and pet food brands, with a stock market valuation of approximately $14 billion.
This acquisition is the latest in a series of major takeovers in the US food manufacturing sector this year. Recently, Campbell’s Soup announced the acquisition of Sovos Brands, the owner of Rao’s pasta sauce, for $2.7 billion.
Prior to that, M&M’s owner Mars acquired Kevin’s Natural Foods, and consumer goods giant Unilever purchased frozen yogurt brand Yasso in June.
Following the acquisition news, Hostess Brands saw its shares rise by over 19%, while JM Smucker’s shares closed 7% lower during New York’s trading day.
