Smucker acquires Folgers in $2.95bn stock trade with P&G

12th June 2008

Jams and baking products manufacturer J M Smucker Co is to acquire Folgers, the country’s top coffee brand, from owner Procter & Gamble in a complicated stock-for-stock deal worth about $2.95bn (€1.91bn), reports said in early June.

Under the tax-free deal, P&G shareholders would get a 53.5% stake in family-controlled Smucker, while the Orrville, Ohio-based jam maker would assume $350m (€227m) of Folgers’ debt.

Smucker, which had earlier bought shortening and peanut butter brands from P&G, stands to see its turnover virtually double as a result of the Folgers business.

P&G announced earlier this year that it was to spin off or split off its Folgers business, with a view to divesting itself of the coffee arm.

The deal is expected to close in the fourth quarter of this year, according to the companies.

Folgers, which also includes the Millstone specialty brand, had sales of $1.6bn (€1.03bn) in its last financial year to the end of June 2007. It has plants in New Orleans, Kansas City, Missouri and Sherman, Texas, and employs 1,250.