CHICAGO, IL
Hillshire Brands has agreed to acquire Pinnacle Foods in a transaction worth approximately $6.6 billion. This acquisition combines the sausage and syrup brands to create a company that sells everything from salami to baking mixes, according to Bloomberg. Combined, the company will have a significantly expanded diverse portfolio with brands that include Jimmy Dean, Hillshire Farm, Ball Park, Wish-Bone, Sara Lee frozen bakery, and many more. The enhanced scale of the operation will also allow the company to increase its presence in frozen, refrigerated, and center of store grocery categories, according to a press release.
“The combination of Hillshire Brands and Pinnacle Foods brings together two highly complementary organizations with strong brands, skilled employees, and lean cost structures,” said Sean Connolly, Hillshire’s President and CEO. “The acquisition creates a leading branded food company with enhanced scale, reach, and capabilities while providing margin expansion and strong EPS accretion. The new Hillshire Brands will have a strengthened position in frozen foods, new opportunities in the center store for our brands and in refrigerated for Pinnacle Foods’ brands. We believe our increased scale combined with a more diversified portfolio will deliver strong, consistent cash flows. This will enable us to continue to invest in our brands, enhance our portfolio, pursue value accretive M&A and deliver significant long-term value to our shareholders.”
Pinnacle Foods CEO Bob Gamgort commented, “This compelling transaction offers Pinnacle Foods shareholders an immediate premium and the opportunity to participate in the tremendous potential of the combined organization. The complementary portfolios and strategic fit of these two companies create significant value for the shareholders of both organizations. Our common passion for developing innovative products and maintaining close ties with our customers will position the combined entity to deliver outstanding benefits for employees, customers, and shareholders.”
Both companies expect the acquisition to provide annual synergies of $140 million. The combined company will operate under the Hillshire Brands name and will be headquartered in Chicago, Illinois. Sean Connolly will serve as President and CEO.
Stay tuned to DeliMarket TV as we continue our coverage on this massive acquisition.
