Unilever sells Skippy peanut butter unit to Hormel in $700M deal
Englewood Cliffs-based food and consumer products conglomerate Unilever today announced plans to sell its Skippy peanut butter business to Austin, Minn.-based Spam maker Hormel Foods Corp. for $700 million in cash.
The transaction includes Unilever's Skippy manufacturing plants in Little Rock, Ark., and Weifang, China, though in an e-mail, a company spokesman said "a limited number of nonmanufacturing employees in each of the functions across the business solely dedicated to the Skippy business … will be informed on an individual basis" if the sale will impact their jobs in New Jersey. The spokesman did not respond to a request to specify which job functions and how many positions at the company will dissolve when the deal closes early this year, pending regulatory approvals.
The agreement signals the company's fourth sale of food brands in two years, as ConAgra Foods Inc. bought its Bertolli and P.F. Chang's frozen meals brands for $265 million in August; Parsippany-based B&G Foods Inc. acquired its Culver Specialty Brands portfolio for $325 million in cash in October 2011; and Cargill paid approximately $342 million for its consumer tomato products business in April 2011.
In today's announcement, Unilever North America President Kees Kruythoff said "as we continue to sharpen our portfolio to deliver sustainable growth for Unilever, we believe that the potential of the Skippy brand can now be more fully realized with Hormel Foods."
Hormel anticipates the product will rake in annual sales of approximately $370 million, including nearly $100 million in international sales — mostly from China, where it is currently the leading peanut butter brand. Hormel CEO Jeffrey M. Ettinger said in a statement he expects Skippy's dominance in China to be "a useful complement to our sales strategy" to bring its existing deli meat products into that market.
Ettinger added the acquisition "allows us to grow our branded presence in the center of the store with a nonmeat protein product." Presently, non-refrigerated grocery products comprise 16 percent of Hormel's net sales, according to the company's fourth-quarter earnings statement.
Hormel expects the deal to be modestly accretive in fiscal 2013, and add 13 cents to 17 cents per share in fiscal 2014.