J.M. Smucker has announced its plans to acquire Hostess Brands, the owner of Twinkies, in a cash-and-stock transaction worth $5.6 billion. The deal was confirmed following a report by The Wall Street Journal.
Under the agreement, Smucker will purchase Hostess for $34.25 per share, with the total enterprise value including approximately $900 million in net debt. The acquisition is expected to generate around $100 million in cost synergies within the first two years.
Hostess Chief Executive Andy Callahan expressed his excitement about the deal, highlighting the strong alignment between the two companies' go-to-market strategies and core business principles.
Shareholders of Hostess stock will receive $30 in cash along with 3% of a Smucker share for each Hostess share they own. The cash portion of the transaction will be funded through a combination of available cash and debt.
The acquisition is slated to be completed in the third quarter of Smucker's current fiscal year, which concludes on April 30. As news of the deal broke, Hostess shares surged by 17% to $32.85 in premarket trading, while Smucker shares experienced a 10% decline, reaching $127.