Unilever Selling Skippy Business to Hormel Foods
Unilever has signed a definitive agreement for the sale of its global Skippy business to Hormel Foods Corp. for about $700 million in cash. The deal includes Unilever’s Skippy manufacturing facilities in Little Rock, Ark., and Weifang, China.
The Skippy peanut butter domestic line comprises 11 SKUs of shelf-stable products. First introduced in 1932, the brand holds the No. 2 share in the growing center store category and is the top brand in the faster-growing subcategory of natural peanut butter. Peanut butter is a $2 billion category with a 74 percent household penetration and is the second most popular sandwich (after ham) in the United States.
Globally, Skippy is the leading peanut butter brand in China and is sold in more than 30 other countries across five continents.
“Skippy is an iconic brand with presence all around the world,” noted Kees Kruythoff, president of Englewood Cliffs, N.J.-based Unilever North America. “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.”
“The acquisition of the Skippy peanut butter business represents a significant opportunity for Hormel Foods,” added Jeffrey M. Ettinger, chairman of the board, president and CEO at Austin, Minn.-based Hormel Foods. “It allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio. 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.”
Barclays is acting as exclusive financial adviser to Hormel in connection with the deal.
Skippy’s total annual sales are about $370 million, with almost $100 million of those sales outside the United States. Hormel expects the acquisition to be modestly accretive in fiscal 2013, with full-year accretion in fiscal 2014 anticipated to be between 13 cents and 17 cents per share.
The transaction, which is subject to regulatory approval and customary closing conditions, is expected to close early this year.