Hormel Foods, maker of Spam lunchmeat, rose to a record after agreeing to buy the Skippy peanut-butter business from Unilever for about $700 million to expand further into China.
Hormel climbed 3.7 percent to $33.20 at the close in New York, the biggest gain since February 2010 and the highest price since it began trading publicly. The purchase of the second- biggest US peanut-butter brand with $370 million in annual sales will “modestly” boost profits in the current financial year and add 13 to 17 cents a share in fiscal 2014, Hormel said.
The deal is a “significant opportunity,” Hormel Chairman and CEO Jeffrey M. 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.”
Hormel plans to come up with new Skippy products, Ettinger added.