The deal has an enterprise value of $4.3 billion. The New York investor Carl Icahn, who is Welbilt's top shareholder with 8.4%, supports the takeover, the companies said.
Welbilt recently traded at $19.07, up 22%. It has doubled in the past six months amid investor optimism about the distribution of vaccines and prospects for economic recovery.
Middleby recently traded at $158.98, down 4.7%. The shares have jumped 62% over the past six months on the same factors.
Terms call for Middleby, Elgin, Ill., to swap 0.124 shares for each share of Welbilt, New Port Richey, Fla.
Based on Middleby's volume-weighted-average price over the 30 trading days ended Tuesday, that’s a 28% premium over Welbilt's similar price.
At closing, Middleby holders will own about 76% of the combined entity and Welbilt holders 24%. which is expected later this year.
In 2020, the two companies combined posted about $3.7 billion of revenue.
The acquisition is expected to immediately add to Middleby's adjusted earnings per share.
The combined company will have "a comprehensive product line, global footprint and advanced technologies and solutions,” said Middleby Chief Executive Timothy FitzGerald in a statement.
Both companies' boards have approved the terms. Middleby and Welbilt expect to close the deal late this year, subject to conditions including regulatory clearance and a vote of holders of both companies.
In other food company news, PepsiCo PEP on Thursday posted stronger-than-expected first-quarter earnings, amid strength in its Frito-Lay snacks division, as millions worked from home during the pandemic.
And last month, The Wall Street Journal reported that Conagra Brands CAG was discussing the sale of its Hebrew National hot dog brand to JBS JBSAY for about $700 million.