Filed by The J. M. Smucker Company
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: The Procter & Gamble Company
Commission File No.: 001-00434
June 4, 2008
To: All Smucker Employees
We are very excited to announce a landmark transaction that brings one of Americas best known
brands into the Smucker family and builds on our Companys continued strategic growth. The J. M.
Smucker Company has reached a definitive agreement with Procter & Gamble to merge the Folgers®
coffee business into the Company in an all-stock Reverse Morris Trust transaction. Today, we
proudly welcome the Folgers business into the Smucker family of brands.
The Folgers brand, founded by James A. Folger in 1850, is similar in many ways to our own core
brands with a rich heritage, high-quality product offerings, and strong consumer loyalty. As the
#1 retail packaged coffee brand in the United States, the transaction of Folgers clearly aligns
with our strategy to own and market #1 food brands in North America. In addition, coffee, like
peanut butter, fruit spreads, cooking oils and flour, is a staple item included in more than 80% of
household pantries.
This is another significant growth milestone for Smucker, as the Folgers brand will be our tenth #1
brand and will be the first $1 billion brand in our portfolio. In addition to the flagship Folgers
brand, the Folgers broad portfolio of products also includes the Millstone® brand along with the
Dunkin Donuts® brand sold through retail channels. We are confident our proven brand management
expertise will allow us to continue Folgers lead in the competitive coffee category and build upon
its unique heritage and equity.
Also included in the transaction are the Folgers production facilities located in New Orleans,
Louisiana; Sherman, Texas; and Kansas City, Missouri, along with the sales, marketing, coffee
procurement, product development, supply chain, and administrative functions in Cincinnati. These
facilities, along with support staff, will add about 1,250 new employees to the Smucker family.
The transaction is expected to increase total Company net sales to approximately $5 billion in the
first full year of ownership and presents greater opportunities for multi-brand merchandising, new
product development, and continued investment in our core brands. This combined portfolio provides
us with increased size and scale that will benefit all our businesses, position us for future
growth, and deliver long-term shareholder value.
An important component of this transaction is the payment to Smucker shareholders of a one-time
special dividend of approximately $5 per share that serves to equalize the transaction. The
closing of the transaction in October 2008 will require shareholder and regulatory approval.
As you know, this has and will continue to require a great deal of effort by many people throughout
the Company in the coming months. We also understand this opportunity comes at a time when we are
already engaged in a number of significant company-wide initiatives. We are committed to
prioritizing these demands and adding additional resources as necessary to support our efforts.
There is no doubt that every persons role will be critical to our success whether focused on
running our business or the integration of Folgers and we thank you for your enthusiasm and
dedication to the business.
We know you will join us in welcoming into the Smucker family the Folgers business and the talented
employees who have built this successful brand. We thank each of you for your commitment to the
Basic Beliefs and to each other as we enter another exciting chapter in our Companys history.
Sincerely,
Brand History
Folgers(r) is the number one brand of retail packaged coffee products in
the United States. Founded in 1850 in San Francisco by James A. Folger,
Folgers has been serving up the finest in coffee flavor for more than 150 years.
Folgers is known for producing superior-quality coffee, using mountain-grown
beans ripened to perfection.
In 1963, the Procter & Gamble Company acquired the Folgers Coffee Company and began national distribution of
products under the Folgers brand name. The Folgers business has doubled in size since the P&G acquisition,
making it America's number one coffee brand.
The brand has a tradition of excellence in marketing and advertising, including the distinctive jingle "The Best
Part of Wakin' Up(tm)."
In addition to its namesake brand, Folgers also sells products under the gourmet coffee brand Millstone(r), and
has an exclusive licensing agreement to market the Dunkin' Donuts(r) brand through retail channels.
Product Overview
Folgers Manufacturing Facilities
Folgers has approximately 1,250 employees, and Folgers products are manufactured at three locations in the
United States. The largest facility is in New Orleans, Louisiana. Other facilities are located in Kansas City, Missouri,
and Sherman, Texas. Marketing, Sales, Commodity Purchasing, Supply Chain, Product Development and
Administrative functions are located in Cincinnati, Ohio.
Strategic Rationale
The Folgers brand is clearly aligned with The J.M. Smucker Company strategy of owning and marketing
number one food brands in North America. The Folgers brand strengthens the Smucker portfolio by providing
increased size and scale that will benefit all of our businesses, and positions us for future growth and delivering
long-term shareholder value.
Folgers offers a wide variety of rich-flavored whole bean, ground and instant coffees.
Folgers Classic Roast is made from Mountain Grown(r) beans, the world's richest and
most aromatic coffee beans.
Folgers also provides consumers with a variety of product choices to fit their lifestyle, such as
Folgers Flavors and decaffeinated varieties and Folgers Simply Smooth(tm), a special "stomach-friendly" coffee
blend.
Folgers Gourmet Selections features only Folgers' most aromatic, 100% Arabica beans, specially blended and
slowly roasted for premium coffee varieties.
The Folgers product portfolio also includes Folgers Cafe Coffees ready-in-minutes cappuccinos, Folgers Coffee
Pods for the Home Cafe(r) single-cup coffee system, and Folgers Coffeehouse Series(tm) featuring distinctive
ground coffee blends.
The Millstone brand has been offering premium crafted coffees since 1981 and is devoted
to selecting only the world's finest premium and Arabica coffee beans for its products.
The Millstone product line-up provides more than 30 different blends, flavors and roasts,
including several varieties of 100% organic certified coffees.
Dunkin' Donuts is America's number one retailer of regular hot coffee by the cup. Sales
of Dunkin' Donuts ground coffee products within retail stores allow loyal consumers to
have the taste they love in their own home. Six varieties are available, including a whole
bean product for those consumers looking for a fresh coffee experience.
Folgers Fact Sheet
|
In connection with the proposed transaction between Smucker and P&G, Smucker
will file a registration statement with the SEC, which will include Smuckers proxy
statement/prospectus. Shareholders are urged to read the proxy statement/prospectus
and any other relevant documents when they become available, because they will contain important
information. The proxy statement/prospectus and other documents relating to
the proposed transaction (when they are available) can be obtained free of charge from
the SECs website at www.sec.gov, or by contacting The J.M. Smucker Company, Shareholder Relations,
Strawberry Lane, Orrville, Ohio 44667 or by calling
(330) 684-3838.
Smucker, P&G and certain of their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders in connection with the proposed
transaction. Information about the directors and executive officers of Smucker & P&G may be found
in their most recent Annual Reports on Form 10-K and definitive proxy statements for their most
recent annual meetings of shareholders filed with the SEC. Additional information regarding the
interests of these participants will also be included in the proxy statement/prospectus when it
becomes available. Smucker documents can be obtained free of charge from the sources indicated
above. P&G documents are available free of charge on the SECs website and also may be obtained by
contacting The Procter & Gamble Company, Shareholder Services Department, PO Box 5572, Cincinnati,
Ohio 45201-5572 or by calling (800) 742-6253.
The J. M. Smucker Company Forward Looking Information
This communication contains certain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially. These include statements
regarding estimates of future earnings and cash flows and expectations as to the closing of the
transaction. Other uncertainties include, but are not limited to, general economic conditions
within the U.S., strength of commodity markets from which raw materials are procured and the
related impact on costs, the ability to obtain regulatory and shareholders approval without
unexpected delays or conditions, integration of the merged businesses in a timely and cost
effective manner, retention of supplier and customer relationships and key employees, the ability
to achieve synergies and cost savings in the amounts and within the time frames currently
anticipated, and other factors affecting share prices and capital markets generally. Other risks
and uncertainties that may materially affect Smucker are detailed from time to time in reports
filed by Smucker with the SEC, including Forms 10-Q, 10-K and 8-K.