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News > Deals
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Smucker buying Jif, Crisco
graphic October 10, 2001: 9:26 a.m. ET

P&G sells peanut butter and cooking oil brands for $1B in stock deal.
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  • P&G beats lowered 3Q forecasts - May 1, 2001
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    NEW YORK (CNNmoney) - Jam maker J.M. Smucker Co. agreed to acquire Jif peanut butter and Crisco shortening and cooking oil from consumer products maker Procter & Gamble Co. in a $1 billion stock deal.

    The purchase is expected to nearly double Smucker's sales to an estimated $1.3 billion and nearly triple earnings in its first full year after the deal closes, excluding special charges.

    The transaction is structured as a tax-free spinoff of the two well known brands by P&G, and an immediate merger of the new stock with Smucker. P&G shareholders will get one share of the newly merged Smucker stock for every fifty shares of P&G they now hold.

    The transaction is expected to close in the second calendar quarter of 2002, and will give current P&G shareholders 53 percent of the new Smucker company.

    Smucker said the purchase will add to earnings per share and that in its first full fiscal year after the deal closes, which ends April 30, 2003, it expects annual earnings to reach $95 million to $105 million.

    Smucker said this deal won't be its last.

    "Not only is this transaction very accretive to earnings, it provides significant cash flows when coupled with our already strong balance sheet," co-CEO Richard Smucker said. "Just as important, it will strengthen our position to acquire other complementary leading food brands, providing opportunity for greater top- and bottom-line growth."

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    P&G said the deal will reduce earnings per share slightly in the current fiscal year, which ends next June, but that it still is comfortable with the current range of earnings per share estimates. It said the move will reduce earnings per share by about 6 cents in fiscal 2003.

    Cincinnati-based P&G announced in April it was looking to possibly sell Jif and Crisco, saying the brands were profitable but no longer a good strategic fit for the company.

    Shares of Orrville, Ohio-based Smucker (SJM: Research, Estimates) lost 65 cents to $25.89 Tuesday and was unchanged in pre-market trading on Instinet, while P&G (PG: Research, Estimates) shares gained 29 cents to close Tuesday trading at $72.54. graphic

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    P&G beats lowered 3Q forecasts - May 1, 2001





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