The deal will be a cash and stock transaction with an estimated value of $6.6 billion — locking in the new company as a dominant leader in grocery categories.
The transaction is set to include Pinnacle Foods’ debt.
“The combination of Hillshire Brands and Pinnacle Foods brings together two highly complementary organizations with strong brands, skilled employees and lean cost structures,” Sean Connolly, president and chief executive officer of Hillshire Brands, said in a statement. “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.”
Just weeks ago, Hillshire announced that it would buy Van’s natural foods.
Hillshire said the merged companies would create $140 million in annual cost savings within three years.
As part of the deal, single shares of Pinnacle Foods common stock is set to be exchanged for $18 in cash and 0.50 shares of Hillshire Brands common stock.
Pinnacle Foods says that it serves more than 85% of American households.
HSH stock is up 3% pre-market.