Hormel Foods (HRL) announced on Thursday that it will be acquiring the Skippy peanut butter business from Unilever (UL) for about $700 million (here is the press release).
I think this is a good acquisition by Hormel. It helps the company diversify its offerings in the packaged/processed food space with a non-meat protein product. Skippy is a well-known brand that holds the No. 2 share of the peanut butter market in the U.S. and it is the leading brand in China; this latter point may help Hormel expand its other products in the region. Hormel is in a good position to make an acquisition of this size (the company has $760 million in cash on its balance sheet) and they expect the deal to be modestly accretive to earnings in fiscal 2013 and fully accretive in fiscal 2014.
The market evidently liked the deal, moving HRL up 3.7% to a new 52-week high. (January 4 update: The stock moved up another 3.3% today.) The stock is currently the 6th largest position in my portfolio.