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J.M. Smucker to buy Hostess for $5.6 billion

J.M. Smucker is purchasing snack cakes company Hostess for $5.6 billion. 

The jelly giant seeks to expand its product offerings with classic American snacks such as Twinkies, Donettes and Ho Hos. 

"With this acquisition, we are adding an iconic sweet snacking platform … to drive continued growth," J.M. Smucker CEO Mark Smucker said in the statement.

Hostess Brands struggled for years and nearly vanished, filing for Chapter 11 bankruptcy reorganization in 2012 after its employees organized a nationwide strike

The Lenexa, Kansas, company said at the time that it was weighed down by higher pension and medical costs than its competitors, whose employees weren't unionized. However, the company's workers blamed the troubles on years of mismanagement and a failure to invest in brands to keep up with consumers' changing tastes. 

Ding Dongs? Twinkies? WHY NOT BOTH? 01:33

However, the company's fortunes soon took a turn for the better in 2013, when investment firms Metropoulos and the Apollo Group bought Hostess for $410 million, saving the iconic cream-filled sponge cake from extinction. The Twinkies maker reemerged with a far less costly operating structure than its predecessor company and was no longer unionized. 

Three years later, Hostess went public with a stock offering that valued the company at more than $2 billion.   

J.M. Smucker said it will pay $34.25 per share to Hostess shareholders as part of the cash and stock transaction, and it will also pick up approximately $900 million in net debt. The boards of both companies unanimously approved the deal, the statement shows.

Associated Press contributed reporting. This is a developing story.

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