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ORRVILLE, Ohio, and MINNEAPOLIS - The J. M. Smucker Company today announced that it will acquire International Multifoods Corp. in a transaction valued at approximately $840 million.
The acquisition adds an array of North American icon brands marketed in the center of the store to the Smucker family of brands. The total retail sales of the categories in which Smucker now participates will increase from $3 billion to more than $6.5 billion, providing a strong platform for future growth, according to Smucker. Combined sales are expected to exceed $2.3 billion based on fiscal 2004 estimates.
In addition to its Smucker's, Jif, and Crisco brands, Smucker's expanded portfolio will include such U.S. brands as Pillsbury baking mixes and ready-to-spread frostings; Hungry Jack pancake mixes, syrup and potato side dishes; Martha White baking mixes and ingredients and Pet evaporated milk and dry creamer.
In Canada, Smucker will significantly increase its existing presence with the addition of No. 1 brands such as Robin Hood flour and baking mixes and Bick's pickles and condiments and also participate in the growing ethnic food category with Golden Temple flour and rice.
Smucker said the transaction is expected to generate synergies that will result in significant cost savings, ranging from $40 million to $60 million by the end of the third year after closing.
"This is an outstanding array of leading North American icon brands," said Tim Smucker, chairman and co-c.e.o. "These brands are complementary to our own, expand the categories in which we participate and add significantly to our existing market presence in Canada. This acquisition is consistent with our strategy of owning and marketing North American icon food brands in the center of the store."
"As with our brands, these icon brands are marketed through similar distribution channels, in the center of the store, allowing us to leverage our current sales, marketing, and distribution network," added Richard Smucker, president, co-c.e.o. and c.f.o.
Some analysts consider the deal pricey, however, in part because of the absence of low-carb products from Multifood's product portfolio, according to a Reuters report.