Timilehin Adejumobi 
J.M. Smucker (SJM.N) said on Monday it will buy Twinkies-maker Hostess Brands (TWNK.O) in a $5.6 billion deal, as major U.S. packaged food companies look to expand their brand portfolios with pandemic-era fortunes dwindling.
In recent months, the U.S. packaged food industry has seen an uptick in mergers as most of the companies seek to improve volumes by rebranding portfolios after benefits from price hikes started wavering.
The equity value of the deal stood at $4.55 billion, as per Reuters calculations, with Jif peanut butter maker J. M. Smucker paying Hostess shareholders $34.25 per share. The cash-and-stock offer represents a premium of 54% on the stock since the day Reuters reported the company was exploring a sale.
Shares of Hostess have since surged 27% and were up 19% at $33.49 in premarket trading on Monday, while those of J.M. Smucker’s were down 7%.
Hostess Brands became an acquisition target after its price hikes boosted revenue but fueled investor concerns over its prospects with its volume growth consistently declining.
The J.M. Smucker and Hostess deal follows a spree of other deals including Campbell Soup’s (CPB.N) $2.7 billion deal for Rao’s sauce maker Sovos Brands (SOVO.O) and Unilever’s (ULVR.L) purchase of premium frozen yogurt brand Yasso in North America.
This report’s information was first seen on REUTERS; to read more, click this link.
