Skippy Sold to HormelUnilever has made a definitive deal with Hormel Foods Corp. to sell its Skippy brand for approximately $700 million. The agreement includes manufacturing facilities for Skippy in Weifang, China and Little Rock, Arkansas.

The Skippy peanut butter brand was first introduced in 1932 and was the first in fast growing natural peanut butter brands. In the U.S., peanut butter sandwiches are the 2nd most popular after ham, and it has a household penetration of 74%.

Skippy brand is sold in 30 countries in five continents, and is the best selling peanut butter in China. Unilever has said that as it continues to sharpen their portfolio, they believe that Skippy’s potential will be more fully achieved with ownership by Hormel Foods. Hormel Foods also welcomed the purchase of the Skippy brand, saying that it would be a good opportunity for the company as it will be able to balance its portfolio and increase their brand presence with non-meat protein offerings. In addition, it would help to make a stronger global presence, as well as complement their China sales strategy. Hormel Foods’ financial adviser in the transaction is Barclays.

Skippy’s total yearly sales stand at approximately $370 million. Of this, $100 million is earned from outside the U.S. For the fiscal year 2013, Hormel expects that the purchase will lead to modest increase in price per share, but for 2014, the one-year increase is expected to stand at 13-17 cents for each share.

The deal between Unilever and Hormel Foods is anticipated to be finalized early in the year and the customary closing terms and regulatory approval is being awaited.