By Chris Isidore
NEW YORK (CNNMoney) — Hormel Foods, the maker of Spam, is paying $700 million to buy the Skippy peanut butter brand from consumer products maker Unilever, the companies announced Thursday.
Hormel said Skippy has annual sales of $370 million, nearly $100 million of which comes from outside the United States. It said it is the leading brand of peanut butter in China and the No. 2 peanut butter brand overall, behind only Jif, which is owned by J.M. Smucker.
Hormel, best known for its meat products such as Spam, Dinty Moore Stew and deli meats, said the deal should add to earnings per share during its current fiscal year. It said the deal gives it a more balanced portfolio of products and should help its entry into the Chinese market.
Unilever, a Dutch and British consumer products conglomerate, has such well-known brands as Dove soap and Ben & Jerry’s ice cream. But it has been selling some of its brands in developed markets to concentrate more on emerging markets. In August, it sold the P.F. Chang’s and Bertolli frozen meals businesses to ConAgra Foods for $265 million.
Shares of Unilever were slightly lower in premarket trading on the news while shares of Hormel were unchanged.
