Hostess, the maker of snack classics like Twinkies and HoHos, is being sold to J.M. Smucker in a cash-and-stock deal worth about $5.6 billion.
Smucker, which makes everything from coffee to peanut butter and jelly, will pay $34.25 per share in cash and stock, and it will also pick up approximately $900 million in net debt.
Hostess Brands Inc. shareholders will receive $30 in cash and 0.03002 shares of The J.M. Smucker Co. stock for each share of stock that they own.
“We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders. Our companies share highly complementary go-to market strategies, and we are very similar in our core business principles and operations,” Hostess President and CEO Andy Callahan said in a prepared statement Monday.
Twinkies went big when Hostess put them on shelves in 1930, and it followed up with a string of sweet concoctions like DingDongs, Zingers and Sno Balls.
In an interview with The Associated Press this year, Hostess CEO XX talked about how the company managed some of the most well-known brands in America, and also how balance was needed as Americans' tastes changed.
The company motored along for decades, but its struggles began to grow in this century, with workers blaming mismanagement and a failure to invest in brands to keep up with changing tastes. The Lenexa, Kansas, company said that it was weighed down by higher pension and medical costs than its competitors, whose employees weren’t unionized.
By 2012, the company with roots dating back to 1925, began selling off its brands in chunks to different buyers. Wonder was sold to Flowers Foods. McKee Foods, which makes Little Debbie snack cakes, snapped up Drake’s Cake, which includes Devil Dogs and Yodels.
The rest, including Twinkies and other Hostess cakes, was acquired by Metropoulos & Co. and Apollo, for $410 million.
Apollo Global Management, founded by Leon Black, buys troubled brands and tries to turn them around before selling them. It's done so with fast-food chains Carl’s Jr. and Hardee’s. Metropoulos & Co., which has revamped then sold off brands including Chef Boyardee and Bumble Bee, also owns Pabst Brewing Co.
Hostess reemerged in 2013 with a far less costly operating structure than its predecessor company and was no longer unionized.
Morgan Stanley's Pam Kaufman said that Hostess offered attractive revenue growth through its U.S. sweet snacks business and opportunities for international expansion. She anticipates merger and acquisition activity ramping up in the packaged food sector due to slowing revenue growth and strong balance sheets.
The boards of The J.M. Smucker Co. and Hostess have both approved the deal, which is expected to close in Smucker's fiscal third quarter.
Smucker's stock dropped 8% at the opening bell, while shares of Hostess surged 19%.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Starbucks’ AI barista aims to speed service and improve experience. Nick Lichtenberg, Fortune Business Editor, explains its impact on workers and customers.
As Big Tech reports Q3 earnings, investors await proof that massive AI and cloud investments from Meta, Apple, Microsoft, and Alphabet are driving real growth.
Eric Trump joins us to discuss American Bitcoin’s mission, market strategy, and why he believes the U.S. must lead the next era of digital currency innovation.
