The announcement comes just over a month after news of another major packaged-food acquisition: Campbell Soup Co. said it would buy Sovos Brands Inc. in a $2.7 billion deal in early August. While consumers rushed back to the center of grocery stores during the pandemic, and revenue from packaged food had stayed elevated thanks to higher prices, consumers are now returning to healthier, fresher foods at the perimeter of the store.
Companies now are likely to either innovate to keep consumer attention or acquire new brands. A June report from Goldman Sachs said growth would moderate across the industry, and specifically called Campbell and Smucker “at risk.”
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Founded in 1930, Hostess owns U.S. household snack brands including Donettes, Ding Dongs and Zingers as well as a variety of Voortman cookies and wafers.
Shares of Hostess Brands have surged more than 26% since before Aug. 25, when Reuters reported the company was exploring a sale after fielding takeover interest from major snack food makers. The firm had a market value of about $3.7 billion as of the end of last week.
Hostess shares rose 17% to $32.85 in early trading, while Smucker sank 11%. Smucker had already fallen 11% this year, giving it a market value of $14.5 billion.