Hormel Foods to acquire Unilever’s Skippy peanut butter unit

US-based Hormel Foods has agreed to acquire the Skippy peanut butter business from Unilever for a cash consideration of approximately $700m.

The move is part of Hormel Foods’ efforts to expand its lunchtime offerings in the US and accelerate growth in China.

The acquisition includes Unilever’s Skippy manufacturing facilities in Little Rock, Arkansas, US and Weifang, China.

Hormel Foods chairman of the board, president and CEO Jeffrey Ettinger said the acquisition of the Skippy peanut butter business is a significant opportunity for Hormel Foods.

"It allows us to grow our branded presence in the centre of the store with a non-meat protein product and it reinforces our balanced portfolio," Ettinger said.

"The fast growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the SPAM® family of products," he added.

Hormel Foods expects the acquisition to modestly add to earnings in fiscal 2013, with full year accretion expected to be between $0.13 and $0.17 per share in fiscal 2014.

The deal, which is subject to regulatory approval and customary closing conditions, is likely to be completed early in 2013.

The Skippy peanut butter brand was introduced in 1932 and its portfolio consists of 11 varieties of peanut butter products.

It is a leading brand in China and is sold in more than 30 countries across the globe.

The brand has annual sales of around $370m, of which about $100m are from outside the US.

Hormel Foods manufactures luncheon meat products under Chi-Chi’s, Dinty Moore, Farmer John, Herdez, Jennie-O, Lloyd’s, SPAM and Stagg brands.

Unilever USA is a wholly-owned subsidiary of British-Dutch multinational consumer goods company Unilever, which produces foods, beverages, cleaning agents and personal care products.