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## Note C: Merger 

On June 1, 2002, the Company merged the Jif peanut butter and Crisco shortening and oils businesses of The Procter & Gamble Company (P&G) with and into the Company in a tax-free stock transaction. Under the terms of the agreement, P&G spun off its Jif and Crisco businesses to its shareholders and immediately thereafter those businesses were merged with and into the Company. P&G shareholders received one Company common share for every 50 P&G common shares that they held as of the record date for the distribution of the Jif and Crisco businesses to the P&G shareholders. The Company’s shareholders received 0.9451 of a new Company common share for each Company common share that they held immediately prior to the merger. Approximately 26,000,000 common shares were issued to the P&G share- holders, valued at approximately $781,485,000 based on the average market price of the Company’s common shares over the period from three days before to three days after the terms of the merger were announced. Upon completion of the merger, the Company had 49,531,376 common shares outstanding. 

The conversion of the Company’s common shares into new Company common shares has been treated in a manner sim- ilar to a reverse stock split. All per share data for all periods presented have been restated to reflect the effects of the conversion. 

The merger and the combination of three brands— Smucker’s, Jif, and Crisco —enhances the Company’s strategic and market position. The merger was accounted for as a purchase business combination and for accounting purposes, the Company was the acquiring enterprise. Accordingly, the results of the Jif and Crisco operations are included in the Company’s consolidated financial statements from the date of the merger. The aggregate purchase price was approx- imately $792,252,000 including $10,767,000 of capitalized acquisition related expenses. In addition, the Company incurred costs of $10,511,000 and $5,031,000 in fiscal 2003 and 2002, respectively, that were directly related to the merger and integration of Jif and Crisco. Due to the nature of these costs, they were expensed as incurred. 

The assets acquired and liabilities assumed in the merger of the Jif and Crisco businesses were recorded at estimated fair values as determined by Company management. The Company obtained independent appraisals for the fair value of property, plant, and equipment and identified intangible assets. A summary of the assets acquired and liabilities assumed in the merger follows: 

(Dollars in thousands) 

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The $488,950,000 of goodwill relates to the U.S. retail market segment and will not be deductible for tax purposes. 

Had the merger of the Jif and Crisco businesses with and into the Company occurred at the beginning of fiscal 2002, pro forma consolidated results would have been as follows: 

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