Blog: ConAgra, B&G touted as potential Skippy suitors

Katy Askew | 12 November 2012

ConAgra Foods and B&G Foods are reportedly among those in the running to acquire Unilever's US peanut butter brand, Skippy.

Unilever announced it was "considering options" for the brand last month and - as we reported in our analysis of the move - one likely potential suitor was US group ConAgra.

ConAgra recently snapped up Unilever's frozen brands in the US and has indicated that it is hoping to drive growth through M&A. According to a Bloomberg report, which cited people familiar with the matter, ConAgra has made a preliminary approach for the business, which could potentially augment its Peter Pan peanut butter unit.  

Another potential buyer, the report suggested, is spreads-to-salsa manufacturer B&G Foods. As a US-focused manufacturer of shelf-stable products, Skippy would slot neatly into B&G's existing centre-store portfolio. And, like ConAgra, B&G has looked to build its portfolio through acquisitions of late: the company recently completed the purchase of New York Style and Old London brands from Chipita.

B&G has recently secured a batch of brands from Unilever. Last year, B&G acquired four brands from Unilever, so the two sides do have a relationship.

Add to this B&G's ship-shape balance sheet - which has been boosted by a stock offering the proceeds of which were used to paydown maturing debt and fund the New York Style, Old London purchase - and B&G certainly looks like a contender for Skippy.

Skippy generated full-year sales of around US$300m in 2011 and, according to analyst estimates, the disposal of Skippy is expected to generate proceeds of between US$300-400m.

The brand represents an attractive asset for those operating in the US food space. Skippy is the second-largest brand in the US nuts and seeds spreads category, with 17% value share. And, according to figures from Eurominitor International, the category itself is expected to report a compound annual growth rate of 2.6%, or in value terms US$200-230m, over the next five years.