Jelly giant J.M. Smucker agrees to buy Twinkie maker Hostess Brands for $5.6 billion

Jelly maker J.M. Smucker is buying Twinkie owner Hostess Brands for $5.6 billion, or $34.25 a share. Hostess shareholders will receive $30 in cash and .03002 shares of Smucker’s stock for each share of Hostess that they owned. Smucker has also agreed to assume Hostess’s debt. The deal is expected to close in Smucker’s fiscal third quarter, which ends in January. As of Friday’s close, shares of Hostess stock have risen 25% this year, giving the company a market value of $3.73 billion. But the company’s shares had already received a significant boost after Reuters reported in late August that it was considering a sale after fielding interest from large food companies, including PepsiCo and Oreo maker Mondelez International.
Hostess saw demand for its Twinkies and Ding Dongs slip after raising prices to mitigate higher commodity costs, sparking investor concern and takeover interest from larger rivals. For the full year, the company is anticipating that its volume will decline. Executives paused price hikes. Its sale to Smucker ends Hostess’s seven-year streak as an independent, publicly traded company. Hostess went public through a merger with a special purpose acquisition company in 2016. $JM Smucker(SJM.US)$ $Hostess Brands(TWNK.US)$