Spreading Out
As part of its ongoing effort to divest “non-core” brands, Cincinnati-based Procter & Gamble is handing Jif peanut butter and Crisco cooking oil to jam and jelly kingpin J.M. Smucker Co. in a $1 billion stock transaction.
However, the arrangement calls for the two brands to be spun off from P&G, then merged with the Orrville, OH-based Smucker operation in a transaction that will give P&G shareholders 53 percent of the new company (although Smucker shareholders will retain voting power on major matters).
The acquisition ends Smucker’s 25-year quest to pair peanut butter with its jelly: former chairman executive Paul Smucker discussed such a deal back in the 1970s with then-P&G chairman John Smale.
The addition of Jif and Crisco is expected to double Smucker’s annual revenues to about $1.3 billion, triple its earnings, and give the nation’s No. 1 fruit spread maker expanded clout in retail circles.
For P&G, the deal lightens the load a bit. The 250-brand CPG maker is out to shed all non-core products and “focus on building our big brands in core categories,” said ceo A.G. Lafley in a statement announcing the deal.
Kraft Foods, Northfield, IL, announced extensive media alliances valued at “several hundred million dollars” with New York City entertainment conglomerates AOL Time Warner and Viacom. The one-year deals enable Kraft to use various properties for integrated brand marketing initiatives. Kraft’s media agencies, led by AOR MediaVest, Chicago, will work with the company’s marketing teams to set national plans for 70-plus brands.
Sprint Corp., Kansas City, KS, and the Virgin Group, London, are teaming on Virgin Mobile USA, a joint venture offering pay-as-you-go wireless communications services and handsets in the U.S. Targeted to 15-to-30-year-olds, the services will roll out in the first half of 2002.
Yahoo, Inc., Sunnyvale, CA, and Sony Pictures Digital, Culver City, CA, inked an agreement to promote Sony films online. The first effort, for October release Riding in Cars with Boys, included show time listings, online ticketing, cast interviews, and behind-the-scenes-footage at Yahoo Movies, wardrobe auctions at Yahoo Auctions, and personalized e-mails from star Drew Barrymore (via Yahoo Delivers).
