Mr. Peanut is on the move. Kraft Heinz (NASDAQ: KHC) announced Thursday that it is selling most of the products sold under the well-established Planters nuts brand to food industry peer Hormel (NYSE: HRL) for $3.35 billion in cash. The latter company pointed out that the effective price is actually around $2.79 billion due to a tax benefit of around $560 million. The acquisition bolsters Hormel's already-considerable portfolio of snack brands. The company owns Skippy peanut butter and the Justin's line of treats, among other assets in the segment. Image source: Getty Images. In its own press release on the Kraft Heinz deal, Hormel said that Planters' net sales in 2020 were roughly $1 billion. It said that owning the brand will "enhance" its overall profit margins and cash flow, although it did not provide further details. Hormel did imply that the purchase was well within its financial means. "The acquisition of the Planters® branded business further demonstrates our disciplined financial approach to [mergers and acquisitions]," it quoted CFO Jim Sheehan as saying. "We expect this acquisition will responsibly leverage our balance sheet and will not compromise our disciplined capital allocation policy, especially our commitment to dividend growth," he added. A popular dividend stock, Hormel is in fact a Dividend Aristocrat -- one of the handful of S&P 500 index components that has raised its payout at least once annually for a minimum of 25 years in a row. As for Kraft Heinz, unloading Planters "will enable us to sharpen our focus on areas with greater growth prospects and competitive advantage for our powerhouse brands," it quoted CEO Miguel Patricio as saying. Both companies expect the transaction to close by the end of the second quarter. It is subject to approval from the relevant regulatory authorities. 10 stocks we like better than Hormel FoodsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Hormel Foods wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source