In a joint statement on Friday (22 July), Seneca and Allens said they had signed a “memorandum of understanding contemplating a merger of the two companies in a stock-for-stock transaction”.
The statement added: “The completion of the transaction is subject to the negotiation and execution of a definitive agreement between the two parties, customary closing conditions, including regulatory, shareholder and lender approvals and satisfactory completion of due diligence.”
Seneca Foods makes products under brands including Libby’s, Stokely’s and Seneca Farms. It manufacturers private-label lines and also makes canned and frozen vegetables for General Mills, which the US food giant then sells under the Green Giant brand.
In May, Seneca Foods posted a slump in annual profits on the back of lower sales. For the year to the end of March, net profit fell 63.5% to US$17.7m. The company’s EBITDA tumbled, down from $106.7m to $54.4m. Net sales dropped 6.7% to $1.19bn.