JM Smucker to Acquire Hostess Brands for $5.6 Billion

The J. M. Smucker Co. (SJM:US) announced on Monday it has officially entered into an agreement to acquire Hostess Brands, Inc. (TWNK:US) for $34.25 per share.

This transaction involves a combination of cash and stock and results in a total enterprise value of approximately $5.6 billion, which includes roughly $900 million in net debt.

This strategic acquisition not only expands J. M. Smucker Co.'s portfolio but also strengthens its presence in growing categories, the company said. It further aligns the company with consumer preferences for convenient and enjoyable food experiences.

"We are excited to announce the acquisition of Hostess Brands, which represents a compelling expansion of our family of brands and a unique opportunity to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions," said Mark Smucker, Chair of the Board, President and Chief Executive Officer.

The agreement signifies a significant step forward in The J. M. Smucker Co.'s ongoing efforts to offer a diverse range of well-loved brands and products that resonate with consumers.

Moreover, the acquisition of Hostess Brands is expected to deliver several advantages, including enhanced net sales growth, improved operating margin, and earnings growth, according to SJM.

It is also anticipated to be accretive to adjusted earnings per share in the first fiscal year.

SJM shares fell nearly 8% on the announcement. Congressman Ro Khanna was selling the stock, which is down 11% year-to-date, in August this year.