Hostess Brands Acquired by JM Smucker in $5.6bn Deal
12 September 2023 – Classic US snack maker Hostess Brands has announced that it will be acquired by rival food giant JM Smucker in a $5.6 billion (£4.5 billion) deal. Shares in Hostess Brands, known for its popular snack brands such as Twinkies, Donettes, and Ho Hos, surged following the news.
JM Smucker, famous for its fruit preserves and Jif peanut butter, emerged as the winning bidder for Hostess Brands. The acquisition comes after reports of interest from other major food brands in America, including PepsiCo, Oreo maker Mondelez International, and Cheerios maker General Mills.
The completion of the deal is expected in the third quarter of Smucker’s current financial year. Hostess Brands, headquartered in Lenexa, Kansas, is responsible for several iconic household brands such as Ding Dongs, Zingers, and Voortman cookies and wafers. With a history dating back over a century, Hostess Brands faced financial difficulties in 2012 and filed for bankruptcy after failed negotiations with its workers’ union.
However, the company was rescued from bankruptcy in 2013 by investment firms Apollo Global Management and Metropoulos & Co. Four years later, Hostess Brands made a successful comeback and is currently listed on the New York’s Nasdaq trading platform.
JM Smucker, based in Ohio and known for its jams, jellies, coffee, and pet food brands, boasts a market valuation of approximately $14 billion. This acquisition is the latest in a series of major takeovers in the US food manufacturing industry. Last month, Campbell’s Soup announced its acquisition of Sovos Bands, the owner of Rao’s pasta sauce, for $2.7 billion.
In the previous month, M&M’s owner Mars acquired Kevin’s Natural Foods, while consumer goods giant Unilever purchased frozen yogurt brand Yasso in June. Following the announcement, Hostess Brands’ shares ended the New York trading day with a gain of more than 19%, while Smucker shares closed 7% lower.
As Hostess Brands and JM Smucker move forward with this significant acquisition, the deal is set to reshape the landscape of the American snack and food industry, combining the portfolios and capabilities of two well-established players in the market.