NEW YORK — Hillshire Brands is pushing further outside the deli case with a deal to buy the maker of Birds Eye frozen vegetables, Duncan Hines cakes mixes and Hungry-Man frozen dinners.
The Chicago-based company, which makes Hillshire Farm lunch meats, Jimmy Dean sausages and Ball Park franks, said Monday that it would buy Pinnacle Foods in a deal valued at $4.23 billion. The move builds up Hillshire's reach into other sections of the supermarket as more Americans watch how much meat they're eating.
Among Pinnacle's other brands are Wish-Bone salad dressing, Celeste frozen pizzas and Vlasic pickles.
"Meats go with vegetables, sandwiches go with pickles," Hillshire CEO Sean Connolly said in explaining why the deal made sense during a conference call with analysts.
In a phone interview, Connolly noted that Americans are eating meat just as often, but less of it per meal. He said that actually benefits Hillshire because food products that incorporate different ingredients — such as its Jimmy Dean breakfast sandwiches — are more profitable than simpler items lunchmeats or sausages.
"We've often said we like products that are more than just meat," Connolly said.
Given its reduced reliance on meat, the combined company is expected to have significantly higher profit margins than Hillshire alone.
Still, some of Pinnacle's brands such as Hungry-Man are seen as having an outdated image at a time when many people are trying to move away from foods they feel are processed or unhealthy. On Tuesday, the frozen food industry even plans to launch its first TV ad defending the nutritional benefits of its products.
The ad is part of a major marketing push by the American Frozen Food Institute, which represents companies including Hillshire, Pinnacle, ConAgra, Nestle and others.
When asked whether Hillshire planned to hold onto all of Pinnacle's products, Connolly said it was "too early to tell," but noted Hillshire's record of investing heavily in its strongest brands. He added that Birds Eye, which has a more health-conscious image, was particularly attractive to Hillshire when eyeing the deal.
Last month, Hillshire also said it was buying Van's Natural Foods, which makes gluten-free foods including cereal, chips and snack bars.
Connolly declined to specify the scope of the layoffs expected as a result of the acquisition. But he noted that the deal is expected to result in $140 million in annual cost savings from consolidated manufacturing and other overhead costs.
Each share of Parsippany, New Jersey-based Pinnacle Foods Inc. common stock will be exchanged for $18 in cash and 0.5 shares of Hillshire Brands Co. common stock. The companies said the implied purchase price is $36.02 per share, an 18 percent premium to Pinnacle's Friday closing price.
Including Pinnacle's outstanding debt, they put the deal's total value at about $6.6 billion.
The combined company will use the Hillshire Brands name and be based in Chicago. Connolly will serve as its president and CEO.
Both companies' boards unanimously approved the acquisition, which is expected to close by September. It still needs shareholder approval.
Hillshire anticipates that it will maintain its annual dividend of 70 cents per share and suspend a previously announced stock repurchase program.
Pinnacle's shares rose 15 percent to $34.92 and Hillshire's shares fell 6 percent to $34.82.
Anda sedang membaca artikel tentang
Hillshire looks beyond meat with Birds Eye, Vlasic
Dengan url
http://newsreviewsis.blogspot.com/2014/05/hillshire-looks-beyond-meat-with-birds.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Hillshire looks beyond meat with Birds Eye, Vlasic
namun jangan lupa untuk meletakkan link
Hillshire looks beyond meat with Birds Eye, Vlasic
sebagai sumbernya
0 komentar:
Posting Komentar