Smucker buys Folgers for $3 billion

[Gentle Giant]

And what, renames it Fuckers?

Would you pay $3 billion for instant coffee?

J.M. Smucker buys Folgers for $2.95 billion
By Thomas J. Sheeran, Associated Press Writer | June 4, 2008

CLEVELAND --Jams and jellies maker J.M. Smucker made a $2.95 billion bid for more of the breakfast table Wednesday, announcing all-stock deal for Folgers coffee.

Smucker also will assume about $350 million of Folgers' debt in the deal with current owner Procter & Gamble.

Smucker will issue a special $5 dividend to Smucker shareholders at a to-be-determined record date, before the acquisition. P&G shareholders will receive about 53.5 percent of Smucker in a tax-free stock-for-stock acquisition after the dividend.

J.M. Smucker Co., based in Orrville, south of Cleveland, expects the acquisition will boost profits by about 9 percent, excluding costs, if it owns the brand for the entire 2009 fiscal year.

With the addition of Folgers, Smucker said it expects sales to increase to nearly double to about $4.7 billion. Discounting costs from the deal, Smucker said it expects to make $3.45 to $3.50 per share in the fiscal year beginning July 1.

The deal with the Cincinnati-based P&G, a consumer products company that makes Pampers, Gillette Fusion razors and Head & Shoulders shampoo, is expected to close in the fourth quarter.

"Coffee is the perfect complement to breakfast or dessert -- two areas we know a lot about," said Richard Smucker, president and co-chief executive of Smucker. "We are excited about the addition of Folgers and the many dimensions this transaction brings in our quest to meet and exceed consumer expectations." (How do you exceed an expectation to have coffee with breakfast or dessert?)

Tim Smucker, chairman and co-chief executive, said in a conference call with analysts that the acquisition would give Smucker a 10th top-ranked brand. "The addition of Folgers clearly aligns with our strategy," he said.

A Deutsche Bank research paper said the deal fit with the Smucker strategy of acquiring leading brands in North America and P&G's practice of "weeding the garden" of slow-growing brands without global potential.

Smucker shares rose 2.5 percent, or $1.36, to $55.11 in early trading Wednesday. The shares have traded between $42.75 and $64.32 the past year.

P&G last year raised the possibility of divesting slower-growing brands, and in January said it might spin off Folgers and give shareholders the option of exchanging P&G stock for shares in the new coffee company.

"Strategically, P&G has exited certain categories in order to focus on our core businesses and enhance the growth profile of the portfolio," said A.G. Lafley, chairman and CEO of Procter & Gamble.

"The structure and terms of this transaction deliver on the goals we stated for the separation of the coffee business from P&G. This transaction maximizes the after-tax value of the coffee business for P&G shareholders and minimizes earnings per share dilution."

While Folgers has been the nation's No. 1 ground coffee brand and is among P&G "billion-dollar brands" in annual sales, it has faced increased competition from Starbucks and other coffee sellers.

It is not the first deal both companies have done. Smucker in 2002 bought Jif peanut butter and Crisco shortening from P&G in an all-stock deal valued at nearly $1 billion. (OK, so clearly, peanut butter is a good complement with jelly, but what's with the grease? Is that how you exceed an expectation for PB&J?)

The Jif and Crisco deals involving Smucker and P&G show "this type of transaction is a recipe for success," Lafley said on the conference call with Smucker executives.

The fast-growing Smucker last year bought Eagle Family Food Holdings Inc., a maker of sweetened condensed and evaporated milk.

Folgers, which dates to a 19th century California family business, has been expanded with gourmet and other specialty lines in recent years.

P&G shares rose 53 cents to $65.94. The shares have traded between $60.76 and $75.18 over the past year.

[clinthopson]

Way back when, in California, Folgers was the dominant brand of coffee. I always thought that it made a pretty lousy cup, not as bad as Yuban, but close.

With a name like Fuckers, it's gotta be good.

[groover]

Maybe they'll introduce a coffee-flavored jam. Mmmm!

[Gary Sisco]

Or jam-flavored coffee. Every other flavor's been used ....

[Pete C]

O ye of little faith

http://www.bienmanger.com/2F650_Coffee_Jam.html

http://www.supermarketguru.com/page.cfm/32350

http://brazilianfoodlove.blogspot.co...offee-jam.html

[Monte Smith]

Coffee jam. What'll they thing of next? Hit it, boys!

Way down among Brazilians
Coffee beans grow by the billions
So they’ve got to find those extra cups to fill
They’ve got an awful lot of coffee in Brazil

You can’t get cherry soda
’cause they’ve got to fill that quota
And the way things are I’ll bet they never will
They’ve got a zillion tons of coffee in Brazil

No tea or tomato juice
You’ll see no potato juice
The planters down in Santos all say no no no

The politician’s daughter
Was accused of drinking water
And was fined a great big fifty dollar bill
They’ve got an awful lot of coffee in Brazil

You date a girl and find out later
She smells just like a percolator
Her perfume was made right on the grill
Why they could percolate the ocean in Brazil

And when their ham and eggs need savor
Coffee ketchup gives ’em flavor
Coffee pickles way outsell the dill
Why they put coffee in the coffee in Brazil




You know, I went to school with a Smucker.

[shrugs]

I remember getting a few cases of Folgers when we were out on a 6 month deployment.

Shit disappeared quick. The Mess Chief was pissed, seems he had planned on saving some for the Goat Locker and prolly the Wardroom too.

[Chris D]

Down in Bolivia, the people are insane.
They want as much for java as they do for cocaine.
Don't try to cheat.
It's impossible to beat.
The only pick-me-up that's here to stay.

[Brian Olewnick]

I know in the Philippines, and I'm guessing around much of the third world, people actually prefer instant coffee like Folger's. No accounting for taste.

[rollhead]

Is it possible to brew a good cup from coffee that comes out of a can?

I am afraid to try it.

Speaking of instant coffee, this is called for in a good brownie recipe I have:

[Pete C]

Originally Posted by rollhead

Is it possible to brew a good cup from coffee that comes out of a can?

Why not?

[Pete C]

Originally Posted by Brian Olewnick

I know in the Philippines, and I'm guessing around much of the third world, people actually prefer instant coffee like Folger's. No accounting for taste.

In Malaysia and South India, where they make great strong local coffee, they serve nescafe to honored guests because it's considered more refined.

[Gary Sisco]

It was instant in Nicaragua, too, but it was because they had to sell the good stuff to obtain hard currency. I only had the real thing once while there.

[clinthopson]

In Mexico, Nescafe is a big thing for the locals. It's especially high among the upper classes.

That's so amazing since Mexico grows some of the best coffee in the world.

[GoodSpeak]

Good.


Maybe now their coffee won't taste like it's been strained through old sweat socks and mildewed carpet. The absolute WORST coffee on this or any other planet.



Ack.