US-based Hormel Foods has entered into an agreement to acquire Skippy peanut butter business from Unilever United States for $700m, as part of its strategy to expand lunchtime offerings in the US and accelerate growth in China.
The transaction includes Skippy manufacturing facilities in Little Rock, Arkansas, US and Weifang, China. Skippy peanut butter is the leading brand in China and is sold in more than 30 countries across the globe. Skippy's has annual sales of approximately $370m.
The deal, which is subject to regulatory approval and customary closing conditions, is expected to be completed early in 2013.
Hormel Foods expects this acquisition to be moderately accretive in 2013, with the full year accretion expected to be between $0.13 and $0.17 per share in fiscal 2014.
Hormel Foods chairman, president and chief executive officer Jeffrey Ettinger said that the acquisition of the Skippy peanut butter business represents a significant opportunity for the company and allows it to strengthen its balanced portfolio and branded presence with a non-meat protein product.
"The fast growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the SPAM family of products," Ettinger said.
Skippy peanut butter brand was introduced in 1932 and its portfolio consists of 11 varieties of peanut butter products.
Hormel Foods manufactures luncheon meat products under Chi-Chi's, Dinty Moore, Farmer John, Herdez, Jennie-O, Lloyd's, SPAM and Stagg brands.
