Hostess Brands, a leading player in the food and beverage industry, is believed to have enlisted the help of financial advisers to consider potential takeover offers from major packaged food companies. This includes notable names like PepsiCo and Mondelez International, who have reportedly expressed interest in acquiring the Twinkies manufacturer.
Shares in Hostess Brands have surged by over 27% to $28.17, their highest level in nine months, following news of the company’s exploration into a potential sale. According to undisclosed sources, Hershey and General Mills are among the other companies that have shown interest in acquiring the business.
Hostess Brands has been performing well financially, with a 3.8% increase in half-year net revenue, reaching $697.8 million. In the same period, the company’s operating income rose by 13.3% to $123.8 million, and net income increased by 8.8% to $70.8 million.
In 2022, Hostess Brands achieved substantial growth, generating net revenue of $1.36 billion, an increase of 18.9% compared to the previous year. The company’s operating income grew by 9.7% to $220.3 million, while net income saw a significant jump of 37.6% to $164.2 million.
Mondelez, known for its brands such as Cadbury chocolate and Oreo biscuits, has previously utilized mergers and acquisitions to expand its snacks portfolio into related sectors. An example of this strategy is their acquisition of US-based energy bar business Clif Bar & Company for $2.9 billion in June 2022. Moreover, Mondelez acquired Greece-based snacks maker Chipita, the owner of sweet baked goods brand 7 Days, in a deal completed just over a year ago.
Hershey, the maker of Reese’s, has also made strategic acquisitions to strengthen its position in the sweet snacks market. In April 2021, the company purchased Irish protein-bar firm Fulfil Nutrition. However, Hershey has also ventured into the savory snacks category, notably with the acquisition of two US pretzel suppliers, Dot’s Homestyle Pretzels and Pretzels Inc., for $1.2 billion in 2021.
