UPDATE 2-J.M. Smucker drops bid to buy Conagra's Wesson oil

From Reuters - March 6, 2018

WASHINGTON (Reuters) - J.M. Smucker Co (SJM.N) said on Tuesday it will abandon its plan to acquire Conagra Brand Incs (CAG.N) Wesson oil brand after the U.S. Federal Trade Commission moved to block the deal, arguing it would likely lessen competition and violate anti-trust law.

Mark Smucker, chief executive of J.M. Smucker, said it is not in the best interest of either party to expend the anticipated significant additional time and resources to challenge the FTCs administrative complaint.

He said the FTC underestimated the significant role that private label brands play in the oils category, which account for approximately 50 percent of all cooking oil sales and hold significantly higher market share at some retailers.

Conagra said in a statement that it was disappointed by the FTCs decision and would continue its evaluation of the role of the Wesson oil business within its portfolio.

We have determined that it is in the best interest of our shareholders, customers and employees to terminate the agreement to sell the Wesson oil business to the J.M. Smucker Company rather than pursue litigation, Conagra said.

There is no break-up fee.

Smucker owns the Crisco brand. If it acquired the Wesson brand, it would have controlled at least 70 percent of the market for branded canola and vegetable oils sold to grocery stores and other retailers, the FTC said in a statement.


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