CLEVELAND — Jams and jellies maker J.M. Smucker is adding coffee to its menu of brands by buying Folgers from consumer products company Procter &Gamble in a $2.95 billion all-stock deal.
The deal announced Wednesday will nearly double Smucker’s size. Folgers will become the 10th No. 1-ranked brand in the Smucker stable that includes its namesake jams, Eagle Brand condensed milk, Hungry Jack pancake mix and two earlier acquisitions from P&G, Jif peanut butter and Crisco cooking oil.
The company said it expects annual sales increases of 6 percent over the long term with acquisitions continuing to play an important role.
Smucker will assume about $350 million of Folgers’ debt and sweetened the offer for its current shareholders with a special pre-acquisition $5 dividend.
Tim Smucker, chairman and co-chief executive, said the special dividend would address any diluted value for Smucker shareholders in the deal and recognize their loyalty. “So both of those are key factors,” he said in a conference call.
With the Folgers deal, P&G shareholders will wind up owning 53.5 percent of Smucker and current Smucker shareholders will own the rest.
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