|Updated: 1/03 12:52 pm
||Published: 1/03 8:15 am
AUSTIN, MN - Hormel Foods Corporation announced Thursday that it will acquire the Skippy peanut butter business from Unilever United States Inc. for approximately $700 million.
Skippy manufacturing plants in Little Rock and Weifang, China are included in the deal.
The Skippy peanut butter domestic line consists of 11 varieties of shelf-stable peanut butter products.
The brand, first introduced in 1932, holds the No. 2 share in shelf-stable peanut butter products and is the leading brand of natural peanut butter. Peanut butter is a $2 billion category with a 74 percent household penetration and is the second most popular sandwich behind ham in the United States.
Internationally, Skippy peanut butter is the leading brand in China and is sold in more than 30 other countries on five continents.
Total annual sales are expected to be approximately $370 million, with nearly $100 million of those sales outside the United States. Hormel Foods expects this acquisition to add modestly to fiscal 2013 results. Full year accretion in fiscal 2014 is expected to be between 13 and 17 cents per share.
"The acquisition of the Skippy® peanut butter business represents a significant opportunity for Hormel Foods. It allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio," said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer at Hormel Foods. "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."
The transaction is expected to close early this year, pending regulatory approval.
Hormel issued the following statement on the future of the Skippy peanut butter plant in Little Rock.
"Hormel Foods intends to maintain current operations at the plant in Little Rock and welcomes the employees there to the Hormel Foods team."