Hostess, the maker of the famous snack cakes Twinkies, Ho-Hos, Ding Dongs, and Zingers, has been bought by the brand Smuckers.
Smuckers, well-known for their jams, peanut butter, and ice cream toppings has acquired the iconic brand Hostess which first came onto the scene in 1919.
Hostess could not turn down the deal presented by Smuckers, a whopping $4.6 billion with Smuckers also taking on the brands $900 million debt. It’s reportedly the biggest “takeover of the year” in US food manufacturing.
Although Hostess saw revenue growth, it was due to price hikes, and there has been mounting concern over declining volume growth.
Smucker’s chief executive Mark Smucker said in a statement:
“With this acquisition, we are adding an iconic sweet snacking platform… to drive continued growth.”
Jerome Monroe Smucker, said the deal would add “an iconic sweet snacking platform” to their portfolio.
Not everyone is optimistic about the move, JP Morgan financial analysts said, “We can’t say we love this transaction from SJM’s perspective. First, the price is high; we are very surprised that SJM (or anyone) is paying this amount.”
Other major brands considered buying Hostess including; PepsiCo, and the maker of Oreos, Mondelez.
In 2012, Hostess faced an impasse and stopped producing their products for a period of a few months amid a strike, and filing for bankruptcy. It returned in 2013 under the name Hostess brands.
News of the event, surged Hostess shares 19% while Smuckers went down 7.1%.
Will the merge of two snack-icons prove to be profitable? Only time will tell.
