The J.M. Smucker Co. said Tuesday that it has signed an agreement with Conagra Brands Inc. to acquire the century-old Wesson oil brand for about $285 million excluding an expected tax benefit of about $45 million. The all-cash transaction will be funded primarily with debt. Smucker expects annual net sales of $230 million and additional adjusted earnings of 10 cents per share in the first full year after closing. Annual cost synergies of about $20 million should be realized within two years after closing. Conagra will continue to manufacture Wesson brand products and provide other services for up to a year following the close of the transaction, at which point Smucker expects to consolidate Wesson production into its existing oil manufacturing facility in Cincinnati. Smucker shares are down 0.5% in Tuesday trading, and down 10% for the last three months. Conagra shares are down 1.3% in Tuesday trading, and down 6.5% for the past three months. The S&P 500 index is up 2% for the last three months.
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