Wow…P&G giving up Folgers Coffee
The end of an era for P&G…just read this in the local press…
Jams and jellies company J.M. Smucker is moving to take over more for of the breakfast table, announcing this morning that it will buy Folgers coffee in an all-stock deal worth about $2.95 billion.
Smucker also will assume about $350 million of Folgers’ debt in the deal with current owner Procter & Gamble.
Adding Folgers will double the size of Smucker, based in the northeast Ohio city of Orrville.
Smucker will issue a special $5 dividend to Smucker shareholders at a to-be-determined record date, before the acquisition. P&G shareholders will receive about 53.5 percent of Smucker in a tax-free stock-for-stock acquisition after the dividend.
J.M. Smucker Co. expects the acquisition will boost profits by about 9 percent, excluding costs, if it owns the brand for the entire 2009 fiscal year. The company expects sales to increase to about $4.7 billion.
The deal with Cincinnati-based P&G is expected to close in the fourth quarter.