On Thursday, January 3, 2013, Hormel Foods Corporation announced plans to buy out Skippy peanut butter from British-Dutch food and consumer giant Unilever. The purchase price is $700 million dollars and Hormel execs are hopeful the acquisition will offer "significant opportunity" for the food giant. CEO of Hormel Jeffrey M. Ettinger offered a statement regarding the purchase with "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 nonmeat protein product and reinforces our balanced portfolio." Ettinger also offered that the purchase of Skippy will “strengthen our global presence, and should be a useful complement to our sales strategy in China for the Span family of products.”
Skippy brand peanut butter is the second best selling peanut butter within the U.S. (falling behind J.M. Smucker's brand Jif) and lead selling brand in China with manufacturing facilities located in Little Rock, Arkansas, and Weifang, China. With earnings of approximately $370 million per year in the U.S. with an estimated $100 million from foreign sales, Skippy brand has offered over 11 varieties of its products since 1932.
As the largest acquisition in Hormel's history of offering fresh, cured, smoked, and frozen meat and non frozen grocery products, this purchase is expected to expand Hormel's shares by 13 to 17 cents by 2014. With consumer focus shifting to accommodate rising food prices and manufacturers concentrating efforts in global markets, the purchase is expected to profit both companies as well as consumers. The acquisition follows Unilever’s trend of dropping much of its North American and European portfolio of household and food products to concentrate efforts on faster growing, emerging markets within other international countries.
The acquisition is awaiting regulatory approval before closing within its early 2013 time frame.
Wall Street Journal