As a subscriber, you have 10 gift items to give each month. Anyone can read what you share. In the long term, Smucker's profits are expected to increase by 6 percent annually, with more acquisitions on the horizon, the company said. Analysts said the deal came as no surprise. Cincinnati-based Procter & Gamble announced its intention to spin off or sell Folgers in January because the brand's annual growth was below the corporate target of 4 to 6 percent.
The CEO of P&G, A. G. Lafley, said in a statement: “Strategically, P&G has exited certain categories to focus on our core businesses and improve the growth profile of the portfolio.”Connie Maneaty, analyst at BMO Capital Markets, said that for Procter & Gamble, the sale of Folgers “would help reveal what the underlying growth rate of the business really is.” P&G said in January that it would split or separate Folgers, as it focused on faster-growing segments, such as health and beauty. P&G President and CEO A.
Lafley said in a statement that selling the business to Smucker in a tax-free stock deal meets the P&G targets set when it announced plans to divest from Folgers: maximizing the after-tax value of the coffee business for P&G shareholders and minimizing earnings per share dilution. The deal is also better for P&G shareholders than a direct spin-off due to cost savings and other benefits Smucker can gain by combining Folgers with its existing portfolio, Lafley said during a conference call with analysts. To execute the deal, P&G will distribute Folgers to P&G shareholders, with a simultaneous merger of Folgers with Smucker. Sales are expected to increase 6 percent annually, in the long term, with gains 8 percent, Smucker said, adding that it will continue to look for acquisitions to help drive sales. The addition of Folgers will add to the products Smucker brings to retailers, allowing more marketing options, said Richard Smucker, president and co-CEO of Smucker. Editing by John Wallace, Leslie Gevirtz.
Soon we will be serving Folgers coffee along with their homonymous jellies and Hungry Jack pancakes. Supermarket News is part of Informa Connect division of Informa PLC. Last year, P&G raised the possibility of divesting slower growing brands, and in January it said it could spin off Folgers and give shareholders the option to exchange shares of P&G for shares in the new coffee company. Consumer products company manufactures Pampers diapers, Gillette Fusion razors and Head & Shoulders shampoo. While Folgers has been the No.
1 coffee brand in North America for decades, dating from a 19th-century California family business, it has expanded with gourmet lines and other specialties in recent years. The deal announced Wednesday will almost double the size of Smucker. Folgers will become tenth No. 1 in Smucker's barn, including their namesake jams, Eagle brand condensed milk, Hungry Jack pancake mix and two previous acquisitions of P&G: Jif peanut butter and Crisco cooking oil. The company said it expects annual sales increases of 6 percent over the long term, with acquisitions that will continue to play a significant role. Tim Smucker, President and Co-CEO, said the special dividend would address any diluted value for Smucker shareholders in the deal and recognize their loyalty.
So both are key factors he said in a conference call. With the Folgers agreement, P&G shareholders will end up owning 53.5 percent of Smucker and current Smucker shareholders will own the rest. Tim Smucker said that the merger of Folgers with Smucker's breakfast and dessert brands opens up many opportunities for brand marketing strategies. That could include adding a Jif discount coupon on a Folgers can. The deal with Cincinnati-based P&G known for brands such as Pampers, Gillette Fusion razors and Head & Shoulders shampoo is expected to close in the fourth quarter. He said he saw the agreement positively in view of Smucker's practice of buying strong brands and revitalizing them with management attention and advertising support.
Susan Fournier from Boston University's school of management called the deal a match made in brand heaven because there were advantages for P&G and Smucker. Kiley manages money for more than 500 retirees of P&G most of whom still own shares in the company said the deal came at a good time with economic downturn leading some consumers to make coffee at home instead of buying lattes from Starbucks. An example video title for this video will be shown here. Notifications can be turned off at any time in browser settings.
Smucker Companyowns all trademarks except that Pillsbury is a trademark of The Pillsbury Company used under license and Carnation is a trademark of Societe des Produits Nestle S. We can't think of a better long-term home for P&G's former employees and coffee brands than Smucker. The addition of Folgers a billion-dollar brand is consistent with Smucker's strategy of owning and marketing number one food brands in North America. However P&G Smucker and some of their respective directors and officers may be considered as participants in shareholder proxy request in relation to proposed transaction under SEC rules. Smucker is expected to close this week a deal to buy Folgers coffee business from Procter & Gamble Co.
Upon completion of transaction expanded Smucker company will add more than 1 250 employees including sales marketing coffee procurement product development supply chain and management functions in Cincinnati and manufacturing plants in New Orleans Louisiana Kansas City Missouri Sherman Texas along with key distribution center in New Orleans. Under terms agreement which has been approved by boards directors both companies P&G will distribute Folgers to shareholders P&G tax-free transaction simultaneous merger with Smucker. Such registration statement will include proxy statement from Smucker which also constitutes Smucker prospectus will be sent Smucker's shareholders. .