By Micah Maidenberg

Hormel Foods Corp. said it agreed to purchase the Planters nut business from Kraft Heinz Co. for $3.35 billion in cash.

The assets Hormel will acquire include the Planters nut brand, Nut-rition, Planters Cheez Balls and Corn Nuts brands, the company said in a statement Thursday.

Earlier this month, The Wall Street Journal reported the two companies were nearing a deal.

Hormel said it expects the transaction to be completed in the second quarter. A tax benefit will reduce the effective purchase price to $2.79 billion, Hormel said.

"The acquisition...significantly expands our presence in the growing snacking space," Chief Executive Jim Snee said.

The Planters portfolio generated about $1 billion in sales last year and includes production facilities in California, Arkansas and Virginia, according to Hormel.

Hormel said operating margins for the business will enhance its grocery products unit next year. By 2024, Hormel believes it will be able generate $50 million to $60 million in cost savings.

The deal will allow Kraft Heinz to better focus on other products, Chief Executive Miguel Patricio said.

"Kraft Heinz prioritizes growth areas and takes strategic actions where appropriate," the company said Thursday.

Last September, Kraft Heinz agreed to sell a significant part of its cheese business, including natural cheeses, to France's Groupe Lactalis SA for $3.2 billion.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

02-11-21 0750ET