PepsiCo’s Frito-Lay Unit to Acquire Cracker Jack

PepsiCo Inc.’s Frito-Lay unit said Wednesday that it agreed to buy the Cracker Jack snacks line from Borden Foods Corp., giving the maker of potato chips and Tostitos corn chips a sweet snack with a long place in American popular culture.

Terms of the purchase weren’t disclosed. Cracker Jack, a candy-coated mix of popcorn and peanuts, is a 104-year-old brand best known for the song “Take Me Out to the Ball Game,” which refers to the snack, and for the toy in each box. Cracker Jack had about $60 million in sales last year, said Frito-Lay spokeswoman Lynn Markley.

Analysts expect Frito-Lay to use its existing factories and delivery trucks to make and distribute Cracker Jack, which had seen sales slide amid competition from similar snacks. Pepsi said it plans to boost sales by improving the product, expanding distribution and increasing advertising.

“It’ll be a challenge for the marketing people . . . to see if they can rejuvenate a very aged brand,” said Robinson-Humphrey Co. analyst David Goldman. He said Pepsi probably didn’t have to pay more than $50 million for Cracker Jack.

Pepsi shares gained 50 cents to close at $39.25 on the New York Stock Exchange.

Columbus, Ohio-based Borden Foods said with the sale, it would likely fire workers who made Cracker Jack at its Chicago-area factory. The transaction is expected to be completed by the end of the year.