By Lisa Kerner
Charlotte, N.C., June 4 - Procter & Gamble Co. announced it will merge its Folgers coffee business into J.M. Smucker Co. in an all-stock reverse Morris Trust transaction valued at approximately $3.3 billion, including $350 million of Folgers' debt.
Smucker will issue a one-time special dividend of $5.00 per share to its shareholders as part of the transaction, a Smucker news release stated. The record date for the dividend has yet to be determined.
Following the dividend, Procter & Gamble shareholders will receive 53.5% of Smucker in a tax-free stock-for-stock merger.
Procter & Gamble said it expects the Folgers separation to occur via a split-off, with the transaction structure finalized in early fall.
Both companies' boards of directors have approved the deal, which is slated to close in the fourth quarter of 2008.
According to Smucker, the company will incur approximately $100 million in one-time costs over the next 12 to 24 months related to the transaction.
"Strategically, Procter & Gamble has exited certain categories in order to focus on our core businesses and enhance the growth profile of the portfolio," Procter & Gamble chairman and chief executive officer A.G. Lafley said in the release.
"This transaction maximizes the after-tax value of the coffee business for Procter & Gamble shareholders and minimizes earnings per share dilution," Lafley added.
Smucker was advised by Banc of America Securities LLC; William Blair & Co., LLC; Calfee, Halter & Griswold LLP; and Weil, Gotshal & Manges LLP.
Morgan Stanley & Co. Inc., Blackstone Group LP, Jones Day, and Cadwalader, Wickersham & Taft LLP advised Procter & Gamble.
Smucker manufactures fruit spreads, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and health and natural foods beverages in North America. The company is based in Orrville, Ohio.
Procter & Gamble is a branded consumer goods company located in Cincinnati.
| Acquirer: | J.M. Smucker Co.
|
| Target: | Procter & Gamble Co.'s Folgers coffee business
|
| Announcement date: | June 4
|
| Price per share: | Procter & Gamble shareholders will receive 53.5% of Smucker
|
| Transaction total: | $3.3 billion
|
| Expected closing: | Fourth quarter of 2008
|
| Stock price for acquirer: | NYSE: SJM: $53.75 on June 3
|
| Stock price of target: | NYSE: PG: $65.41 on June 3
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
