AUSTIN, Minn. -- Hormel Foods Corp. said that it has entered into a definitive agreement to acquire the Skippy peanut butter business from Unilever United States Inc. The Skippy peanut butter domestic line consists of 11 varieties of shelf-stable peanut butter products.
The purchase price is approximately $700 million.
The deal includes Unilever's Skippy manufacturing facilities in Little Rock, Ark., and Weifang, China.
The brand, first introduced in 1932, holds the No. 2 share in its category and is the leading brand in the faster-growing subcategory of natural peanut butter, according to the company. Peanut butter is a $2 billion category with a 74% household penetration and is the second most popular sandwich behind ham in the United States.
Internationally, Skippy peanut butter is the leading brand in China and is sold in more than 30 other countries on five continents.
Hormel expects total annual sales to be approximately $370 million, with nearly $100 million of those sales outside the United States.
"The acquisition of the Skippy peanut butter business represents a significant opportunity for Hormel Foods. It allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio," said Jeffrey M. Ettinger, chairman, president and CEO at Hormel Foods. "The fast growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the SPAM family of products."
Kees Kruythoff, president of Englewood Cliffs, N.J.-based Unilever North America, said, "Skippy is an iconic brand with presence all around the world. As we continue to sharpen our portfolio to deliver sustainable growth for Unilever, we believe that the potential of the Skippy brand can now be more fully realized with Hormel Foods."
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the United States and other jurisdictions.
Hormel Foods, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products.
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