J.M. Smucker (NYSE:SJM) stock is falling on Monday after the food and beverage company announced a massive $5.6 billion acquisition.
According to a press release from the company, it plans to acquire Hostess (NASDAQ:TWNK) for $34.25 per share. The company will use a mix of cash and stock with a total value of $5.6 billion to fuel this transaction.
The deal sending SJM stock lower today will see it acquire TWNK stock for $30 in cash and .03002 shares of SJM stock for each share of TWNK stock. Investors will note that this represents a 21.8% premium for TWNK stock compared to its prior closing price.
Mark Smucker, Chairman, President and CEO of J.M. Smucker, said the following about the deal:
“With this acquisition, we are adding an iconic sweet snacking platform; enhancing our ability to deliver brands consumers love and convenient solutions they desire; and leveraging the attributes Hostess Brands offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organization and consistent retail execution across channels to drive continued growth.”
Timing of the SJM and TWNK Stock Deal
J.M. Smucker is expecting its acquisition of Hostess to close during the third quarter of its current fiscal year, which ends on April 30, 2024. It also mentions that both companies’ boards have given their unanimous support to the deal. That means it just needs approval from shareholders and regulators.
SJM stock is down 8% and TWNK stock is up 19% as of Monday morning.
Investors can find even more of the most recent stock market news ready to go below!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
