Mr Peanut joins Skippy family in $ 3.4 billion sale

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Now he has a new home: Kraft sells Planters to Hormel, the maker of Spam and Skippy, under a $ 3.35 billion deal.

The sale, which is expected 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. . Planters generated around $ 1 billion in sales in 2020.

For Kraft, dropping Planters will offer a chance to focus on its more successful brands like Lunchables, the company said in a press release Thursday. The deal is also helping Hormel expand its snack offering at a time when people are eating more at home.

Miguel Patricio, CEO of Kraft Heinz, led an effort to Kraft Heinz’s (KHC) outlook around.

Before the pandemic, Kraft was struggling. A lot of Wall Street said so has failed to adapt to the changing tastes of consumers, who avoid processed foods.

With Baby Nut, Planters solves the problem of their deceased mascot Mr. Peanut
Analysts also questioned the strategic decisions of private equity firm 3G, which has partnered with Berkshire Hathaway (BRKA) to first buy Heinz, then merge it with Kraft in a 2015 agreement. After Berkshire Hathaway, 3G is the company’s second largest shareholder. In the aftermath of the merger, the combined company focused on cutting costs – at the expense of much-needed innovation, Wall Street analysts say.

In 2019, the company announced a $ 15 billion write-down on its Kraft and Oscar Mayer brands. He subsequently announced nearly $ 500 million in depreciation of the value of several other underperforming brands, including Velveeta, Maxwell House and Miracle Whip.

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

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

—— CNN’s Paul R. La Monica contributed to this report.

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