Kraft Heinz (NYSE:KHC) announced Thursday it has sold its Planters and its other nuts businesses to Spam maker Hormel (NYSE:HRL) for $3.35 billion.
The cash deal includes most Planters products and the Corn Nuts brand. Hormel will also receive the global intellectual property rights to the two brands, subject to existing third-party licenses in other countries. The nuts business contributed about $1.1 billion in sales last year to Kraft Heinz, mostly focused in the U.S.
As part of Kraft Heinz’s multiyear turnaround effort, executives told investors in September that they have changed from looking at its portfolio as a series of products to how it can fulfill different consumer needs. The company has also been trimming less-popular products from its lineup and sold part of its cheese business to Lactalis for $3.2 billion.
In a statement, Kraft Heinz CEO Miguel Patricio said the nuts sale enables the company to focus on other snack brands, like Lunchables and P3.
Hormel CEO Jim Snee said that the acquisition broadens its scope for future deals in the snacking category. "The acquisition of the Planters business adds another $1 billion brand to our portfolio and significantly expands our presence in the growing snacking space," he said.
Planters is best known for its nuts and snack mixes and its mascot, Mr. Peanut. In recent years, the brand’s biggest splash came from an advertising campaign last year which killed off Mr. Peanut and resurrected him as a baby in its Super Bowl spot.
KHC shares gathered $2.01, or 5.9%, to $35.90, while HRL retreated 33 cents to $49.50.
