$700 million Skippy takeover will smooth the way for Spam in China
The makers of Spam luncheon meat are buying Skippy, America's second-biggest peanut butter brand and also China's top seller.
Skippy: Top seller in China
Hormel will pay British-Dutch giant Unilever about $700 million and get two factories, one in China and one in Arkansas into the bargain, reports Bloomberg.
Hormel Chairman and CEO Jeffrey Ettinger described the deal as a “significant opportunity.”
He added, "It should be a useful complement to our sales strategy in China for the Spam family of products.”
Hormel has doubled Spam’s overseas revenue in the past five years going into markets such as Japan. There slices of Spam are put on rice and bundled with seaweed for a dish called spam musubi.
In China Hormel has positioned Spam as "an upscale treat, with ads that promise “juicy, meaty satisfaction,” said Bloomberg.
Skippy has about $370 million in annual sales and will “modestly” boost profits in the current financial year, Minnesota-based Hormel said.
The Skippy brand, introduced in 1932, comprises 11 varieties of peanut-butter products. It once hired artist Norman Rockwell for its print ads.
Unilever got the brand when it bought Bestfoods for $22.7 billion in 2000. But Skippy always found it a tough fight against J.M. Smucker’s Jif, top brand in the $2 billion U.S. peanut-butter market.