Folgers to join Smucker’s lineup

Jams and jellies maker J.M. Smucker Co. is adding coffee to its menu of brands by buying Folgers from Procter & Gamble Co. in a $2.95-billion, all-stock deal, Smucker’s biggest ever.

The deal announced Wednesday would nearly double Smucker’s size. Folgers will become the 10th No. 1-ranked brand in the Smucker stable that includes its namesake jams, Eagle Brand condensed milk, Hungry Jack pancake mix and two earlier acquisitions from P&G;, Jif peanut butter and Crisco cooking oil.

Orrville, Ohio-based Smucker will assume about $350 million of Folgers’ debt and sweetened the offer for its current shareholders with a special pre-acquisition $5 dividend. With the Folgers deal, P&G; shareholders will wind up owning 53.5% of Smucker and current Smucker shareholders will own the rest.

Timothy Smucker, chairman and co-chief executive, said the merger of Folgers with Smucker’s breakfast and dessert brands opened many opportunities for brand marketing strategies.

The company expects that the acquisition will boost its profit by about 9%, excluding costs, during the fiscal year that begins July 1.

With Folgers, Smucker said it expected annual sales to nearly double to about $4.7 billion. Discounting costs from the deal, Smucker said it expected to make $3.45 to $3.50 a share in its next fiscal year.

The deal with Cincinnati-based P&G;, known for such consumer products as Pampers, Gillette razors and Head & Shoulders shampoo, is expected to close later this year.

Shares of Smucker rose 12 cents Wednesday to $53.87. P&G; gained $1.04 to $66.45.