Mr. Peanut joins the Skippy family on a $ 3.4 billion sale

Mr. Peanut joins the Skippy family on a $ 3.4 billion sale

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Now he has a new home: Kraft is selling Planters to Hormel, maker of Spam and Skippy, in a $ 3.35 billion deal.

The sale, due to close this year, will give Hormel ownership of most of the products included in the Planters brand, including mixed nuts, trail mix, corn nuts, Cheez Balls and Cheez Curls. The planters generated about $ 1 billion in sales in 2020.

For Kraft, abandoning Planters will offer a chance to focus on its most successful brands, such as Lunchables, the company said in a press release on Thursday. The deal also helps Hormel expand its snack offerings at a time when people are eating more at home.

Kraft Heinz CEO Miguel Patricio has led an effort to transform Kraft Heinz’s (KHC) perspectives around.

Before the pandemic, Kraft was struggling. Many on Wall Street said that has failed to adapt to changes in consumer tastes, who are avoiding processed foods.

With Baby Nut, Planters solves the problem of his late mascot Mr. Peanut
Analysts also questioned the strategic decisions of the private equity firm 3G, which partnered with Berkshire Hathaway (BRKA) to first buy Heinz and then merge it with Kraft in a 2015 deal. After Berkshire Hathaway, 3G is the company’s second largest shareholder. After the merger, the combined company worked to cut costs – at the expense of much-needed innovation, according to Wall Street analysts.

In 2019, the company announced a $ 15 billion write-off of its brands Kraft and Oscar Mayer. Later, it announced a nearly $ 500 million decline in value for several other low-performing brands, including Velveeta, Maxwell House and Miracle Whip.

But the pandemic, which prompted people to stock up on basic and nostalgic foods, helped boost Kraft’s sales.

In the fourth quarter of 2020, net sales grew 6% to $ 6.9 billion, exceeding Wall Street expectations. The company’s stock jumped nearly 2% before the market opened on Thursday.

– Paul R. La Monica, from CNN, contributed to this report.

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