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Name | Symbol | Market | Type |
---|---|---|---|
Unilever PLC | NYSE:UL | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.095 | -0.18% | 52.035 | 52.27 | 51.90 | 52.20 | 1,558,778 | 19:40:11 |
By Ben Fox Rubin
Hillshire Brands Co. on Monday said it agreed to buy Pinnacle Foods Inc. for roughly $4.3 billion in cash and stock, giving the packaged-meat producer a broader line of grocery staples, including frozen foods, salad dressing and maple syrup.
The combined company, which will bring together the Vlasic pickles and Ball Park hot dogs brands, will operate under the Hillshire Brands name and be based in Chicago. Sean Connolly will retain his CEO position at the combined company.
The deal is expected to close by September.
Pinnacle shareholders will receive $18 in cash and 0.5 shares for each Pinnacle share, amounting to total consideration of $36.48--a 20% premium over Friday's closing price.
The companies said the total enterprise value of the transaction is about $6.6 billion, when including Pinnacle's debt.
As part of the deal, affiliates of Blackstone Group L.P., which own about 51% of Pinnacle, agreed to vote their shares in favor of the deal. Hillshire Brands will appoint a representative from Blackstone to its board upon the closing of the transaction.
Blackstone bought Parsippany, N.J.-based Pinnacle for $2.16 billion in 2007. It bolted on Birds Eye Foods Inc. in 2009 with a $1.3 billion deal, and Pinnacle bought the Wish-Bone salad dressing business from Unilever PLC last year. Pinnacle, maker of Van de Kamp's fish sticks and Vlasic pickles, went public last year amid a handful of deals backed by private-equity shops.
Hillshire, formerly known as Sara Lee Corp., spun off its coffee and tea business in 2012. The maker of Jimmy Dean sausage and Ball Park hot dogs last month agreed to buy Van's Natural Foods for about $165 million, expanding the meat company's breakfast lineup to include waffles, pancakes and cereal.
The combination is expected to immediately benefit earnings, Hillshire said. By the end of the third year of the tie-up, Hillshire expects to achieve $140 million in estimated annual cost synergies, primarily from supply chain changes and consolidation of overhead.
Hillshire said it expects to maintain its current annual dividend of 70 cents but said it would suspend its share-buyback program.
Write to Ben Fox Rubin at ben.rubin@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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