US food company J M Smucker has announced that it has agreed to acquire International Multifoods for around US$840m.

The two companies said their boards had approved a definitive agreement, under which Smucker will acquire Multifoods in a transaction valued at around $840m, including the assumption of around $340m in debt.

The acquisition will expand Smucker’s range of US brands to include Pillsbury baking mixes and ready-to-spread frostings, Hungry Jack pancake mixes and Martha White baking mixes. In Canada, the deal will add Robin Hood flour and baking mixes, Bick’s pickles and condiments, and Golden Temple flour and rice to Smucker’s portfolio.

Combined sales will exceed $2.3bn based on fiscal 2004 estimates, the companies said.

Smucker said the acquisition would also provide the company with a stronger platform for growth, enhanced financial strength and significant cost savings due to better efficiencies, including an improved supply chain. The deal is expected to generate cost savings of between $40m and $60m by the end of the third year after the acquisition is closed.