Benzinga | Feb 3, 2021 09:40AM EST

Kraft Heinz Close To Selling Iconic Planters Brand To Hormel For $3B: Report

Kraft Heinz Co (NASDAQ:KHC) is nearing a deal to sell its iconic Planters snack brand to Hormel Foods Corp (NYSE:HRL) for $3 billion, The Wall Street Journal reported Tuesday afternoon.

What Happened: Planters might be best known for its Mr.Peanut mascot and seems like a good match for Hormel Foods, the maker of Skippy peanut butter. The deal also makes sense from a business perspective as Kraft has been divesting brands for years while Hormel has been an active buyer of brands over the years.

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Most recently, Kraft sold part of its cheese business to France-based Groupe Lactalis for $3.2 billion in late 2020. On Hormel's end, the company acquired in early 2020 Salder's Smokehouse, a maker of smoked meats for retail and foodservice customers.

Why It's Important: Kraft's nuts and salted-snacks unit reported 2019 sales of just under $1 billion, but the overall snack category experienced a surge in demand since the early days of the COVID-19 pandemic.

Shares of Hormel Foods spiked Tuesday afternoon after the report first hit, but were slightly higher by 0.5% early Wednesday morning.

What's Next: If the deal is reached, it would mark Hormel's largest acquisition to date. Sources told WSJ a deal could be confirmed in the coming days, although cautioned there is no guarantee an agreement will be reached.