stock is up nearly 5% following a report that the company is nearing a deal to buy the Planters snack brand from
A deal would mark part of a continuing pattern of asset sales at the firm, as well as more jostling for position among packaged-food makers.
The Wall Street Journal reports that Hormel Foods (ticker: HRL) is closing in on an agreement to buy the maker of nuts and mixes from Kraft Heinz (KHC) in a deal that values the brand at roughly $3 billion, according to people close to the situation. Both companies declined to comment, saying it is their practice not to comment on rumors or speculation.
Kraft Heinz, which ran into trouble pre-pandemic, has been looking to sell some noncore parts of its portfolio as part of its turnaround plan. It most recently parted with a portion of its cheese business. The company’s transformation efforts have gotten a boost recently from the Covid-19 pandemic, which led to an increase in at-home snacking. Consumers have favored trusted, well known brands like Planters.
While Covid is still a real threat, some investors are already looking ahead to a post-pandemic future that may not be as favorable to packaged food makers. Others believe higher at-home consumption is here to stay.
Companies with an eye to future sales have made a number of deals recently, looking to position themselves within the shifting consumer landscape. More may follow.
Hormel is already involved in the nuts category to an extent, as it owns the Skippy’s and Justin’s brands, which sell peanut and other nut butters. However, as the Journal notes, the Planters acquisition would be the biggest in a string of recent acquisitions for the company.
Hormel was up 4.8% to $49.15 in afternoon trading. The shares have gained 5.6% since the start of 2021. Kraft Heinz was up 0.6% to $33.45 but has fallen 3.5% year to date.
Write to Teresa Rivas at [email protected]
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