Spam and Peanut Butter? Damn Skippy!

Hormel Foods Corp. said today that it would buy Skippy—second only to peanut butter rival Jif in the U.S. while standing No. 1 in China—from Unilever for around $700 million. Austin, Minn.-based Hormel cited a $2 billion peanut butter market with a 74 percent household penetration in the U.S. as the primary strengths of the purchase.

Jeffrey M. Ettinger, Hormel's chief executive, also suggested Skippy would help round out his company's line of products and, interestingly, work well in accompaniment of Spam, in particular.

"[The acquisition] allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio," Ettinger said in a statement. "The fast growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the Spam family of products."

The 80-year-old peanut butter brand totaled $300 million in sales during 2011, and Ettinger's firm believes it reached $370 million last year. The move appears to signal Hormel's intent to diversify its product portfolio going forward with non-meat items.