Hormel Foods is to acquire the Skippy peanut butter business from Unilever for around $700 million.
The Skippy peanut butter domestic line consists of 11 varieties of shelf-stable peanut butter products. The brand, first introduced in 1932, is said to hold the No. 2 share in this growing centre of the store category and to be the leading brand in the faster growing subcategory of natural peanut butter. Peanut butter is a $2 billion category with a 74% household penetration and is the second most popular sandwich behind ham in the United States.
Internationally, Skippy peanut butter is said to be 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 be modestly accretive in fiscal 2013. 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 centre 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."