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J.M. Smucker to Acquire Hostess for $5.6 Billion

J.M. Smucker is buying snack cakes company Hostess for $5.6 billion.

The jelly giant aims to expand its product offerings with popular American snacks like Twinkies, Donettes, and Ho Hos.

“With this acquisition, we are adding an iconic sweet snacking platform… to drive continued growth,” J.M. Smucker CEO Mark Smucker said in a statement.

Hostess Brands struggled for years and almost disappeared, filing for Chapter 11 bankruptcy reorganization in 2012 after its employees organized a nationwide strike.

The Lenexa, Kansas-based company said at the time that it was burdened by higher pension and medical costs compared to its non-unionized competitors. However, the company’s workers blamed the problems on years of mismanagement and a failure to invest in brands to keep up with changing consumer preferences.

Ding Dongs? Twinkies? WHY NOT BOTH?


However, the company’s fortunes soon turned around in 2013 when investment firms Metropoulos and the Apollo Group acquired Hostess for $410 million, saving the iconic cream-filled sponge cake from extinction. The Twinkies maker reemerged with a much more cost-efficient operating structure and was no longer unionized.

Three years later, Hostess went public with a stock offering that valued the company at over $2 billion.

J.M. Smucker said it will pay $34.25 per share to Hostess shareholders as part of the cash and stock transaction, and it will also assume around $900 million in net debt. The boards of both companies approved the deal unanimously, according to the statement.

Associated Press contributed reporting. This is a developing story.

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