The J. M. Smucker Company to Merge P&G's Folgers Business into the Company in an All-Stock Transaction
Folgers is the leading producer of retail packaged coffee products in theUnited States with a 150 year history. Folgers' broad portfolio of productsare sold primarily under its flagship Folgers(R) brand. This brand joins awidely recognized portfolio of brands that include Smucker's(R), Jif(R),Crisco(R), Pillsbury(R), Eagle Brand(R), Hungry Jack(R), Robin Hood(R) andBick's(R). The proposed transaction creates a powerful portfolio of brandsand an even stronger Smucker Company with annual sales approaching $5 billion,and greater scale that will benefit all of its businesses. With the additionof Folgers, the total size of the categories in which Smucker participatesincreases to approximately $15 billion as compared to $1 billion in 2002. Theaddition of Folgers, a billion dollar brand, is consistent with Smucker'sstrategy to own and market number one food brands in North America.
The merger provides investors with a compelling financial story andfurther strengthens Smucker's ability to deliver enhanced shareholder valueover time. Smucker believes that the addition of the Folgers business willbenefit Smucker and its shareholders in several important ways, as detailedbelow:
"Folgers is a perfect strategic fit within our portfolio of leading andiconic North American food brands," said Tim Smucker, Chairman and Co-ChiefExecutive Officer of Smucker. "Folgers will become our tenth number one brandin North America and will further enhance the high quality, great tasting,diverse product offerings that consumers expect from Smucker. We are proud towelcome the talented Folgers employees to the Smucker Company where brands andpeople are about more than making and marketing products. We believe the manycommon values shared by our organizations represent a great foundation for asmooth integration."
"Coffee is the perfect complement to breakfast or dessert -- two areas weknow a lot about," said Richard Smucker, President and Co-Chief ExecutiveOfficer of Smucker. "Like Smucker's, Jif, Crisco, and Pillsbury, the Folgersbrand has exceptional equity with consumers. The addition of Folgers will alsoenhance our ability to reach out to consumers at retail through complementary,multi-brand merchandising activities. We are excited about the addition ofFolgers and the many dimensions this transaction brings in our quest to meetand exceed consumer expectations."
"Since adding Jif and Crisco in 2002, we have continued to expand ourportfolio by completing ten brand acquisitions," added Tim Smucker. "We havedeveloped a core competency of integrating our acquisitions in a timelyfashion and growing the brands. As an example, Jif has experienced anannualized sales growth of 7 percent, increased its share of market by 7 sharepoints, and introduced a variety of new products."
"Strategically, P&G has exited certain categories in order to focus on ourcore businesses and enhance the growth profile of the portfolio," said A.G.Lafley, Chairman of the Board and Chief Executive Officer of Procter & Gamble."The structure and terms of this transaction deliver on the
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