Cereal maker Kellogg Co has agreed to buy Pringles potato chips from Procter & Gamble Co for $2.7 billion in a cash deal that will nearly triple the cereal maker’s international snack business. Via Reuters:
The transaction will also let household goods maker P&G finally leave the food business after its agreement with Diamond Foods Inc fell apart.
Shares of Kellogg, which is aiming to expand a snack portfolio that already includes Keebler cookies, Cheez-It crackers and Kashi snack bars, rose 6 percent in Wednesday morning trading.
Adding Pringles chips to the mix will increase the size of Kellogg’s snack business to where it will account for as much of total revenue as its well-known cereal business, the world’s largest, with brands like Special K and Rice Krispies.
P&G had agreed to sell Pringles to Diamond Foods Inc last year, but that deal fell apart this month following the discovery of improper accounting that led Diamond to replace its chief executive and finance chief. The U.S. government is looking into Diamond’s accounting practices.
