Hillshire Brands agreed to acquire Pinnacle Foods for $4.3 billion in cash and stock. Including the debt, the deal is valued at $6.6 billion.
The deal is expected to close around September.
Hillshire, formerly the food unit of Sara Lee Corp, offered $18 in cash and one half of its shares for each Pinnacle share. Pinnacle shareholders will control 33% stake in the merger company.
The offer valued Pinnacle at $26.48 a share, about 20% premium to Friday’s closing price.
Blackstone Group LP, the leverage buyout group, took Pinnacle for about $2.2 billion in 2007 and the company was relisted on the New York Stock Exchange in 2013.
Blackstone is expected to generate at least $2 billion of profit on investments of $700 million in Pinnacle in 2007 and 2010. Pinnacle also paid huge management fees and high interest rates to Blackstone.
Separately, Allergan board rejected Valeant Pharmaceutical unsolicited offer of $50 billion and said that the proposal “substantially undervalues” and creates significant risks for shareholders and the deal is not in the best interest of the company.
Valeant, based in Quebec province in Canada teamed with activist investor William A. Ackman and announced an unsolicited bid last month.
Ackman controls 9.7% of Allergan, the maker of Botox and other medical dermatology and aesthetics products.