On Thursday, Hormel Foods announced it has signed a definitive agreement to buy Unilever's Skippy peanut butter business, the No. 2 U.S. branded peanut butter and the No. 1 peanut butter brand in China.
In a statement, Hormel said it expects Skippy to record $370 million in annual sales, of which more than 25% come from outside the U.S. Hormel is paying $700 million for Skippy, or just under two times sales.
The company expects the acquisition to be "modestly accretive" in fiscal 2013, and to add $0.13 to $0.17 per share in fiscal 2014.
The Skippy peanut butter domestic line consists of 11 varieties of shelf-stable peanut butter products. According to Hormel, peanut butter is a $2 billion category and the second-most-popular sandwich behind ham in the United States.
The article Hormel to Buy Skippy Peanut Butter for $700 Million originally appeared on Fool.com.Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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