J.M. Smucker nears roughly $5 billion deal to buy Twinkies-owner Hostess Brands -sources By Reuters

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<span>© Reuters. Hostess Brands “Twinkies” are displayed in a store in the Manhattan borough of New York City, U.S. July 5, 2016. REUTERS/Brendan McDermid/file photo</span><br />
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<p>By Anirban Sen, Greg Roumeliotis and Dimpal Gulwani</p>
<p>(Reuters) -Jif peanut butter maker J.M. Smucker is nearing a deal to buy Hostess Brands (NASDAQ:), the owner of Twinkies snack cakes, for close to $5 billion, sources familiar with the matter said on Sunday.</p>
<p>The deal value excludes Hostess’ net debt of about $900 million, the sources told Reuters, requesting anonymity because the matter is confidential.</p>
<p>Hostess has a market capitalization of about $3.73 billion, according to LSEG data, after a nearly 27% jump in its stock since Aug. 25, when Reuters reported the company was exploring a sale after fielding takeover interest from major food makers.</p>
<p>Hostess and J.M. Smucker did not immediately respond to Reuters’ request for comment outside regular business hours. The Wall Street Journal first reported on a potential deal.</p>
<p>U.S. packaged food companies have seen an uptick in mergers amid fading pandemic-era fortunes and as benefits of price hikes start to taper off.</p>
<p>Among recent deals, <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Campbell Soup </span></span> (NYSE:) struck a $2.7 billion deal for Rao’s sauce maker Sovos Brands, <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Unilever </span></span> (LON:) bought premium frozen yogurt brand Yasso in North America, while Snickers maker Mars acquired healthy foods maker Kevin’s Natural Foods.</p>
<p>Hostess became an acquisition target after it raised prices on some of its products to boost revenue, fueling investor concerns over its prospects.</p>
<p>Based in Lenexa, Kansas, Hostess was founded in 1930 and is behind several iconic household brands, including Ho-Hos, Ding Dongs, Zingers, and Voortman cookies and wafers.</p>
<p>The company filed for bankruptcy twice, in 2004 and 2012, due to a combination of private equity owners saddling it with debt and failing to come up with new snacks that appealed to consumers.</p>
<p>J.M. Smucker, which also houses coffee and pet food brands, has a market value of over $14 billion.</p>
<p>Following an industry-wide trend, the Orrville Ohio-based company had also raised prices of its products like jams, jellies and pet food, helping boost its profit forecast for the year.</p>
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