J.M. Smucker buying Hostess

J.M. Smucker agreed to acquire Twinkies maker Hostess Brands for about $5.6 billion, furthering a growing consolidation trend among the companies that stock the shelf-stable aisles at the heart of supermarkets.

Investors will get $34.25 in cash and stock for each Hostess Brands share, according to a statement on Monday.

The price, which includes $900 million in debt, represents a 22% premium to Hostess’s closing price on Sept. 8.

The announcement comes just over a month after news of another major packaged-food acquisition: Campbell Soup said it would buy Sovos Brands in a $2.7 billion deal in early August.

While consumers rushed back to the center of grocery stores during the pandemic, and revenue from packaged food had stayed elevated thanks to higher prices, consumers are returning to healthier, fresher foods at the perimeter of the store.

Companies are likely to either innovate to keep consumer attention or acquire new brands.

A June report from Goldman Sachs said growth would moderate across the industry, and specifically called Campbell and Smucker “at risk.”

Founded in 1930, Hostess owns some of the biggest household snack brands in the U.S., including Donettes, Ding Dongs and Zingers, as well as a variety of Voortman cookies and wafers, according to its website.

Shares of Hostess Brands have surged more than 26% since before Aug. 25, when Reuters reported the company was exploring a sale after fielding takeover interest from major snack-food makers.

Apple extends Qualcomm deal

Apple is extending an agreement to get modem semiconductors from Qualcomm for three more years, a sign that its ambitious effort to design the chips in-house is taking longer than expected. Qualcomm shares surged on the news.

The new pact will cover “smartphone launches in 2024, 2025 and 2026,” Qualcomm said in a statement Monday.

The companies’ agreement had been set to end this year, and the latest iPhone – due on Tuesday – was expected to be one of the last to rely on the Qualcomm modem chip.

Instead, Qualcomm will maintain its lucrative position within Apple’s supply chain.

The iPhone maker is Qualcomm’s largest customer – accounting for nearly a quarter of revenue, according to data compiled by Bloomberg.

And their relationship helps validate Qualcomm’s claim to having the best smartphone modem, a critical component that allows devices to connect to the internet and make calls. Starting with the iPhone 12 generation, the chip has supported speedier 5G networks.

“This agreement reinforces Qualcomm’s track record of sustained leadership across 5G technologies and products,” the San Diego-based chipmaker said.

Though the financial terms of the new deal weren’t disclosed, Qualcomm said it was similar to the previous arrangement signed in 2019.

From wire reports