The J.M. Smucker Co. is acquiring Hostess Brands in a $5.6 billion deal, the companies said Monday morning in a joint announcement
By JOEL PHELPS | arkadelphian.com
This post was last updated at 3:50 PM 9/11/23.
A Hostess spokesperson had no details regarding whether the acquisition will have any immediate effects on the newly renovated Gum Springs, Arkansas, bakery, which is expected to be operating this fall and provide 150 jobs.
“This acquisition is further testament to Clark County’s appeal as a hub for growth and opportunity within the food and beverage industry.”
— Shelley Short, Arkadelphia Alliance CEO
“Hostess has no comment at this time beyond the press release it issued this morning,” Kyla MacLennan, director of corporate and consumer communications, said in an email.
The press release detailed transactions of shares and included comments from each company’s chief executive officer.
Smucker Co. is headquartered in Orrville, Ohio. Local officials said that, with a name like Smuckers, the deal has to be good.
“Hostess is already a wonderful community partner and employer,” said Shelley Short, CEO of the Arkadelphia Regional Economic Development Alliance. “I am confident that will continue as a member of the J.M. Smucker corporate family. This acquisition is further testament to Clark County’s appeal as a hub for growth and opportunity within the food and beverage industry.”
Arkadelphia City Manager Gary Brinkley said Hostess’s acquisition by another big-name company shows the value of the snack-making brand. “I personally think it’s great that we have a company investing in Clark County that is desirable for purchase by another very well-known company,” Brinkley told The Arkadelphian. “Hostess has done an excellent job creating value in the marketplace, and is now worthy of the purchase price.”
Following a “test run” last month, Hostess was expected to officially begin producing snack cakes at the Clark County factory this October.
RELATED: Hostess on track for August test run
Smucker owns more than 40 other brands, including coffee giant Folgers and Jif peanut butter, as well as pet treat brands Milk Bone and Meow Mix. Hostess Brands had been quiet about speculation in previous weeks of a buyout when Reuters broke news that the company had hired Morgan Stanley for advice on handling negotiations.
BITS & PIECES: Hostess mum on report of buyout
“I am extremely proud of the entire Hostess Brands team for the legacy they created in building a premier snacking company and driving industry leading returns for our investors,” said Hostess CEO Andy Callahan. “Today represents another exciting chapter for our company as we combine our iconic snacking brands with The J.M. Smucker Co.’s family of beloved brands.”
Mark Smucker, CEO of his namesake company, added: “We are excited to announce the acquisition of Hostess Brands, which represents a compelling expansion of our family of brands and a unique opportunity to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions. With this acquisition, we are adding an iconic sweet snacking platform; enhancing our ability to deliver brands consumers love and convenient solutions they desire; and leveraging the attributes Hostess offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organization and consistent retail execution across channels to drive continued growth. Our organization is well positioned to deliver on the great potential our expanded family of brands offers, as has been reflected by our history of growth through acquisition and the successful integration of new categories to our business. We look forward to this exciting new chapter for The J.M. Smucker Co.”
Smucker acquisition of Hostess in national news
News of the buyout made headlines nationwide on Monday.
The Wall Street Journal reported the $5.6 billion price tag could have been the result of a bidding war between Smucker and General Mills for the acquisition of Hostess. Smucker stock fell 6.4% Monday after news of the acquisition, WSJ reported.
About 3,000 Hostess employees, as well as manufacturing facilities in five states and one Canadian province, will be transferred to Smucker’s portfolio, according to USA Today.
Analysts at JPMorgan Chase described the takeover as “more of a win for Hostess than for Smucker,” the New York Times reported.
Past Smucker acquisitions
With a portfolio of more than 40 brands, all Smucker-owned companies seem to have retained their original names after the acquisitions. Plant closings and layoffs, however, generally follow news of Smucker acquisitions.
Smucker purchased Folgers in 2008. Two years later, Folgers coffee plants shut down in Sherman, Texas, and Kansas City, Missouri, while Smucker shuttered jam factories in Memphis, Tennessee, and Saint Marie, Quebec, to “modernize other plants to cut costs,” according to the Dallas, Texas-based WFAA news organization. Folgers still operates at two facilities in New Orleans, where it employs more than 700 people.
In April 2018 Smucker bought Ainsworth Pet Nutrition in a $1.9 billion cash deal. That July, Smucker cut 77 sales, human resources, and marketing jobs, although the Pennsylvania-based production plant, which employed about 700 people, remained in operation.
In 2021, around the same time Smucker sold its organic beverage and grains business (and the manufacturing facilities associated with those brands) it closed a manufacturing facility in Wisconsin, transferring that work to its main facility in Ohio. That same year the company announced it was building a $1.1 billion Uncrustables plant and distribution center in Alabama — the third of its kind. News of building a plant was reportedly not linked to the plant closure. The next year, in the company’s goal of “evolving our corporate organizational structure,” Smucker would close a liquid coffee facility in Virginia.
However, not all acquisitions led to immediate closings or staff reductions. When Smucker bought the Roundwich in 1998, the company rebranded the product as Uncrustables and continued making them in West Fargo, North Dakota, the original location; it would be another 11 years before Smucker shut down that plant, affecting 140 employees, in order to “consolidate production” at its manufacturing facility in Scottsville, Kentucky — about 600 miles closer to the Smucker headquarters in Orrville.
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