J.M. Smucker is purchasing snack cakes company Hostess for $5.6 billion.
The jelly giant seeks to expand its product offerings with classic American snacks such as Twinkies, Donettes and Ho Hos.
“With this acquisition, we are adding an iconic sweet snacking platform … to drive continued growth,” J.M. Smucker CEO Mark Smucker said in the statement.
The Lenexa, Kansas, company said at the time that it was weighed down by higher pension and medical costs than its competitors, whose employees weren’t unionized. However, the company’s workers blamed the troubles on years of mismanagement and a failure to invest in brands to keep up with consumers’ changing tastes.
However, the company’s fortunes soon took a turn for the better in 2013, when investment firms Metropoulos and the Apollo Groupbought Hostess for $410 million, saving the iconic cream-filled sponge cake from extinction. The Twinkies maker reemerged with a far less costly operating structure than its predecessor company and was no longer unionized.
J.M. Smucker said it will pay $34.25 per share to Hostess shareholders as part of the cash and stock transaction, and it will also pick up approximately $900 million in net debt. The boards of both companies unanimously approved the deal, the statement shows.
Associated Press contributed reporting. This is a developing story.