Hillshire Buys Pinnacle Foods for $4.23 Billion

Mike Santoli of Yahoo Finance says the goal is to buy other brands and to consolidate them into one entity.
3:47 | 05/12/14

Coming up in the next {{countdown}} {{countdownlbl}}

Coming up next:

{{nextVideo.title}}

{{nextVideo.description}}

Skip to this video now

Now Playing:

{{currentVideo.title}}

More information on this video
Enhanced full screen
Explore related content
Comments
Related Extras
Related Videos
Video Transcript
Transcript for Hillshire Buys Pinnacle Foods for $4.23 Billion
Okay. It's Monday may twelfth the markets are open on Wall Street in today's big number four point two -- three billion dollars that. It's how much he'll -- brands he is pain to. Eat -- pinnacle foods that the marriage of Jimmy Dean and aunt Jemima along with some other brands certainly. A lot of investors talking about that. Where New York so joining -- -- -- -- Yahoo! finance this Monday morning might -- the details of this deal. Short hills or is it agreed to pay eighteen dollars in cash plus half -- share of hill -- to all political force holders it brings the total value of the deal to -- 36 dollars per share. Which is does -- does total up to about four point three billion dollars. Also more than two billion dollars in -- -- really the total value of the whole enterprise but six point six billion dollars pretty big deal and interestingly. In addition to. Pinnacle shares being up as you would expect -- that offer on the table and agreed to. I -- Shire shares are also up a little bit so that kind of implies that Wall -- -- -- likes the deal. It's kind of a rarity right -- these kinds of acquisitions whether they be friendly or not often times it's usually one stock stocks up one is the other. I is kind of an aggressive move by the fire I mean really expanding its presence in grocery -- -- pinnacle. Who is behind a lot of the brands that we see Duncan Hines mrs. Paul's frozen fish -- so. You know clearly that that is a that's a big foothold in our grocery basket. It is an in this has the strategy of those -- -- kind of almost has to be. If you Trace back the history of these companies -- are used to be Sara Lee Sara Lee sold the coffee -- businesses -- a lot of non food businesses off. To kind of focus on its grocery brands. And really all they can do because it's really not a lot of growth. In aggregate in these out old grocery brands and -- the game is to buy other brands in kind of consolidate. The operations cuts and cost and have that much more sway over the store's that you're selling into and now that's been house or strategists -- third significant acquisition. In about a year. That they've made and actually pinnacle foods if you Trace it back -- used to be known as classic as in the pickles and I used to be -- -- Campbell Soup. So basically all these brands have been kind of kind of handed off over the years to somebody else and now they're being consolidated back into one -- Now -- -- says also got a hankering for rag grew I mean that's that's -- -- under unilateral right Unilever it's. It seems like they are perhaps in the running as Unilever has said that they may well be considering. Offers for its -- -- brand as it tries to simplifies its its overall operations. And it does seem -- logical. Candidate he'll -- does to be one of the buyers not a question is you know if the bidding gets a little bit rich so to speak if it's you have two billion dollars as people are saying it's not clear that they'll be able to how the financial wherewithal to kind of go ahead to head with other potential bidders not really out. -- -- yes I'm that far along yet but definitely I still think no matter why these companies are going to be looking. For more of these leading brands to fold into -- operate I mean not not quite the big numbers that we see in -- -- deals but still I mean these are high priced meal tickets right. They're pretty high price but they mostly reflect the fact that these are products that are in virtually every household in the country so it's a steady business it's not a growth business. And it basically is -- -- -- set a matter of owning different isles in the supermarket. It really has been not have been the game for a while they talk about you know the outside of the market which is kind of -- you know the that the dairy aisles and things like that the interiors all the dry goods when you wanna have both ideally if you canceling it. Diverse vacation I suppose it's also that are -- -- -- My -- look at Yahoo! finance Mike thanks so much Arabic that served OK thank of course you can keep up with the latest headlines right here on abcnews.com. -- much in the big number and then that's where New York.

This transcript has been automatically generated and may not be 100% accurate.

{"id":23679867,"title":"Hillshire Buys Pinnacle Foods for $4.23 Billion","duration":"3:47","description":"Mike Santoli of Yahoo Finance says the goal is to buy other brands and to consolidate them into one entity.","section":"Business","mediaType":"Default"}