M&A Flashback: When Coffee Met Jelly

Berkshire Hathaway  agreed to buy Duracell for $4.7 billion in November, but that deal wasn’t the first time the battery maker’s parent, Procter & Gamble PG +0.18%, sold off a name-brand subsidiary. In 2007 P&G considered dumping its Folgers coffee business in a tax-free spinoff to shareholders. Enter the Smucker brothers, Tim and Richard, who saw coffee as a perfect fit with the breakfast focus of their jelly producer. The 2008 financial crisis nearly scuttled the deal (P&G’s size and stability were all that kept a $350 million debt financing in place), but in the end the $3.7 billion merger of Folgers and JM Smucker SJM +0.02% marked P&G’s largest spinoff — a title it held until Berkshire found itself in need of new batteries.

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