Hormel Foods to buy deli meat maker Columbus for $850m

Hormel Foods has agreed to buy deli meat and salami company Columbus Manufacturing for around $850m.

Hormel said the acquisition is expected to be modestly accretive to earnings per share in fiscal 2018, with full-year accretion in fiscal 2019 of between 6 to 8 cents per share.

President and chief executive officer Jim Snee said: "We are pleased to add Columbus to the Hormel Foods family. Columbus has an outstanding reputation in the food industry and is well-positioned in the advantaged retail deli category. Columbus is capitalising on one of the fastest-growing areas in the retail grocery store with premium, authentic products that are on-trend with today's consumers who are looking for unique experiences, flavours, and products.

"The acquisition of Columbus will serve as a catalyst for uniting all our deli businesses into one customer-facing organisation. This acquisition significantly enhances our scale in the deli by broadening our portfolio of products, customers, and consumers. The synergies we can unlock with this acquisition are clear and I'm excited for the next evolution of our company."

Columbus, which refers to itself as a "millennial-focused brand", generates total annual sales of around $300m, with an expected growth rate in excess of 5%. It will continue to operate out of California and will report into Hormel's refrigerated foods segment.

Earlier this year, Hormel bought Brazilian meat processor Cidade do Sol for $104m and pizza-topping maker Fontanini for $425m.