Utz has deal with Zappe potato chips

The York County, Pa., maker of Utz potato chips has agreed to a business combination with a Louisiana snack food company, the companies announced Thursday.

The structure of the deal between Utz Quality Foods Inc., of Hanover, and Zappe Endeavors L.L.C. of Gramercy, La., was unclear. In a statement, the companies said they had signed a letter of intent with an anticipated closing in the first quarter of 2011.

In 2009, Utz backed out of a proposed sale to Snyder's of Hanover Inc., saying a request for information on that deal from the Federal Trade Commission would strain the company. Snyder's later announced a merger with North Carolina's Lance Inc.

Other terms of the Utz-Zappe agreement, including whether one company is fully acquiring the other, were not released. Utz spokesman George Neiderer said he could not comment further.

"The combined snack food companies anticipate increased sales, wider distribution, and increased employment from this merger of family-owned businesses," the companies' statement said.

Utz, best known for the potato chips that William and Salie Utz began making in 1921 and delivering to Baltimore markets, has four factories in Hanover, a national distribution system, and about 2,400 workers. Zappe employment figures were not available.

Zappe was founded in 1985 by Ron Zappe. Its plants in Louisiana, Pennsylvania, and California make chips under the Zapp's, Dirty, and California Chips labels.

Zappe died June 1 at age 67. At the time, the company's general manager, Rod Olson, said Zappe's had grown to the point that it was planning to build another Pennsylvania plant to supply the Northeast.

Olson did not return a call for comment.