Lance Inc., the maker of Cape Cod potato chips and Stella D’oro cookies, agreed to merge with pretzel maker Snyder’s of Hanover Inc. to improve distribution of the companies’ snacks.
Lance investors will receive a one-time dividend of $3.75 a share, the companies said in a statement today. Snyder’s and Lance will each own about 50 percent of the new company, to be called Snyder’s-Lance Inc. The deal will close later this year pending shareholder and regulatory approval, the companies said.
Both companies have pursued acquisitions in the past year to win more bargaining power with national retailers like Kroger Co. and Wal-Mart Stores Inc. The new company will compete against PepsiCo Inc.’s Frito-Lay in the salty snacks business.
“When Lance starts layering in the pretzel business it gains more clout, more credibility, more shelf space with the retailer,” said Scott Mushkin, an analyst at Jefferies &Co. in New York. The merger would also give Lance national distribution for its Cape Cod chips, he said.
Lance jumped $5.30, or 33 percent, to $21.30 today in Nasdaq Stock Market trading. Through yesterday, the stock had fallen 39 percent this year.
Lance investors will receive a one-time dividend of $3.75 a share, the companies said in a statement today. Snyder’s and Lance will each own about 50 percent of the new company, to be called Snyder’s-Lance Inc. The deal will close later this year pending shareholder and regulatory approval, the companies said.
Both companies have pursued acquisitions in the past year to win more bargaining power with national retailers like Kroger Co. and Wal-Mart Stores Inc. The new company will compete against PepsiCo Inc.’s Frito-Lay in the salty snacks business.
“When Lance starts layering in the pretzel business it gains more clout, more credibility, more shelf space with the retailer,” said Scott Mushkin, an analyst at Jefferies &Co. in New York. The merger would also give Lance national distribution for its Cape Cod chips, he said.
Lance jumped $5.30, or 33 percent, to $21.30 today in Nasdaq Stock Market trading. Through yesterday, the stock had fallen 39 percent this year.
