Smucker Buys International Multifoods for $840 Million

J.M. Smucker Co. will buy International Multifoods Corp. for $840 million.

The deal brings Smucker's total 2004 sales to $2.3 billion and adds the Pillsbury, Hungry Jack and Martha White brands to its portfolio.

Smucker plans to boost marketing spending as it ratchets up cross-promotion between brands.

The acquisition makes Smucker a bigger player in dry grocery, especially in the baking aisle, where it can leverage its Crisco brand with baking mixes from International Multifoods. (Orrville, OH-based Smucker also owns Jif.)

"These brands are complementary to our own, expand the categories in which we participate and add significantly to our existing market presence in Canada," said Chairman and co-CEO Tim Smucker in a statement. "This acquisition is consistent with our strategy of owning and marketing North American icon food brands in the center of the store."

Smucker hopes to leverage its broader portfolio with retailers to do more cross-branding and cross-promotion, as it does with Smucker jam and Jif peanut butter.

Pending regulatory approval, the deal is set to close in June. Smucker will keep using the Pillsbury Doughboy and Barrelhead under the licensing agreement that Minneapolis-based International Multifoods set with Pillsbury Co. when it bought the baking mixes business in 2002. (Pillsbury sold the business to meet SEC requirements for Pillsbury's merger with General Mills.) The license agreement runs 20 years without royalties and is perpetually renewable.