Hillshire Brands Co said it would buy Pinnacle Foods Inc for about $6.6 billion including debt, adding products such as Duncan Hines baking mixes to its portfolio that includes Jimmy Dean sausages and Hillshire Farm luncheon meats.
Hillshire, formerly the food business of Sara Lee Corp, is offering $18.00 in cash and half of one of its shares for each Pinnacle share.
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Based on Hillshire's Friday closing price of $36.95, the offer values Pinnacle at $4.28 billion, or $36.48 per share, excluding debt.
Pinnacle had debt of $2.5 billion as of December 29, according to a regulatory filing.
Hillshire's shares rose 4.2 percent to $38.50 in premarket trading on Monday. Pinnacle shares were trading at $38.75.
Private equity firm Blackstone Group LP , which owns about 51 percent of Pinnacle, has agreed to vote in favor of the deal, the companies said.
Blackstone took Pinnacle private for about $2.2 billion in 2007. The company returned to the stock market in March 2013.
Hillshire said it expects the deal to immediately add to earnings and generate $140 million in annual cost savings three years after the deal closes.
Hillshire is also known for its frozen pies, cakes and cheesecake.
(Reporting by Siddharth Cavale in Bangalore; Editing by Saumyadeb Chakrabarty)