CINCINNATI-- Procter & Gamble said today it has agreed to sell its Jif peanut butter and Crisco oil businesses to jam-manufacturer J.M. Smucker in an all-stock deal.
Under the terms of the agreement, which is structured to be tax-free to P&G investors, shareholders will receive one share of new Smucker stock in exchange for 50 shares of P&G.
Not unexpectedly, P&G announced it was shopping the two brands around this spring. P&G's food portfolio now consists of Folgers and Millstone coffee, Sunny Delight drinks and Pringles potato chips--brands that had previously been moved into its now-defunct joint venture with Coca-Cola.
"Jif and Crisco are strong U.S. brands, but they're no longer a strategic fit for P&G as we focus on building our big brands in core categories, president and CEO A.G. Lafley said in a press release today.
The combined annual sales of Crisco and Jif are about $600 million. Smucker said it expects its annual sales to double to $1.3 billion after the deal and that first year net income should be in the $100 million range.