Tiffany Hsu wrote yesterday in the Los Angeles Times that Hostess will sell Wonder Bread and other brands such as Nature’s Pride for $390 million dollars. Flowers Foods will be buying the Hostess products. Flower Foods currently owns Tastykake and Nature’s Own brands.
Hsu goes on to say, “Flowers, of Thomasville, Ga., will spend $360 million for the Wonder, Nature’s Pride, Butternut, Home Pride and Merita labels as well as 20 Hostess bakeries and 38 depots. Hostess, based in Irving, Texas, will sell Flowers its Beefsteak bread brand separately in a $30-million arrangement.”
A federal bankruptcy judge has allowed Hostess to wind down gradually. The company will cease making Twinkies and Ding Dongs and will have let go many of its current 18,500 employees.
Hsu reports the final deal with Flower Foods, must be approved in bankruptcy court and any regulatory hurdles must be cleared as well.
The shutdown and subsequent bankruptcy came as a result of the union strike. The union members were striking over an 8 percent cut in salary proposed for this year. According to ABC local, ’The Irving, Texas, company said the strike crippled its ability to make and deliver its products at several locations.
Meanwhile, the Globe and Mail wrote the shutdown of Hostess is not expected to have an effect upon the Canadian market. They report that, “In Canada, Saputo Inc., the country’s largest snack cake maker, and George Weston Ltd. already own the rights to some Hostess brands. Weston’s senior vice-president of investor relations, Geoffrey Wilson, said the company is not interested in any Hostess assets that might come up for sale. But Weston is keen on continued investment in and marketing of Wonder Bread, for which it owns the Canadian rights, rights that are not affected by events south of the border.”
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