J.M. Smucker To Acquire Twinkies Maker for $5.6 Billion

J.M. Smucker recently announced its plans to purchase Hostess Brands, the maker of Twinkies, in a $5.6 billion deal.

Following this news, Hostess shares surged by 27% and were trading at $33.49, up 19% in premarket trading on Monday, while shares of J.M. Smucker were down by 7%. I Photo: Hostess Facebook

This move comes as major US packaged food companies seek to expand their brand portfolios, given the decline in fortunes during the pandemic era. This information was reported by Anirban Sen, Greg Roumeliotis, and Dimpal Gulwani for Reuters.

In recent months, the US packaged food industry has witnessed an increase in mergers as many companies aim to boost volumes by rebranding their portfolios, especially as the benefits of price hikes have started to wane.

The equity value of the deal, according to Reuters calculations, stands at $4.55 billion. J. M. Smucker, known for Jif peanut butter, will pay Hostess shareholders $34.25 per share in a cash-and-stock offer, representing a 54% premium on the stock since Reuters first reported that the company was exploring a sale.

Following this news, Hostess shares surged by 27% and were trading at $33.49, up 19% in premarket trading on Monday, while shares of J.M. Smucker were down by 7%.

Hostess Brands became an acquisition target after implementing price hikes that boosted revenue but raised investor concerns about its future due to declining volume growth.

The acquisition of Hostess by J.M. Smucker follows a series of other deals in the industry, including Campbell Soup's $2.7 billion acquisition of Sovos Brands, the maker of Rao's sauce, and Unilever's purchase of the premium frozen yogurt brand Yasso in North America.

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