Smucker Acquires Twinkies Parent Hostess for $5.6 Billion

J.M. Smucker purchased Hostess Brands in a $5.6 billion deal, the companies announced Monday.

Smucker, known for its fruit spreads and ice cream toppings, said the acquisition will contribute $1.5 billion in net sales. The price tag also includes Hostess’ $900 million debt.

Hostess’ shares jumped around 19% in mid-day trading on Monday following the news. It has a market capitalization of $3.74 billion. Hostess’ stock, which relaunched under a new ticker, TWNK, in 2016, has soared roughly 27% since Reuters first reported that the company was exploring a sale on Aug. 25. 

Smucker's shares were down over 6%. It has a market capitalization of almost $14.5 billion.

“We are excited to announce the acquisition of Hostess Brands, which represents a compelling expansion of our family of brands and a unique opportunity to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions,” said Smucker's president and chief executive officer Mark Smucker.

The acquisition will be completed by the end of April 2024.

Companies began eyeing an acquisition of Hostess after the Lenexa, Kan.-based snack maker raised prices on some of its products, which sparked concerns from investors about its future, Reuters reported.

A decade ago, Hostess attempted to start fresh under new ownership after two Chapter 11 bankruptcy filings in 2004 and 2012. Investment firms Apollo Global Management and the C. Dean Metropoulos and Company purchased the embattled snack company in an effort to pull it out of liquidation, The Wall Street Journal reported.

This time around, Smucker was competing for Hostess against other big-name food companies, including General Mills, which houses 46 different brands including Cheerios and Betty Crocker, the Journal reported.

Smucker’s portfolio of brands, aside from its signature offerings, also includes Jif peanut butter; Folgers Coffee; Big Heart Pet Brands, which makes Milk-Bone dog treats and Meow Mix cat food; and Ainsworth Pet Nutrition.

Smucker's acquisition of Hostess is its latest diversification into the snack world. At an industry conference last week, Smucker expressed interest in acquiring new businesses in several categories, including coffee, pet food and others, the Journal reported.

Hostess declined to comment further.

Update 11:51 a.m. ET: Updated to include J.M. Smucker's and Hostess' announcement of the acquisition, as well as response from Hostess.