The Kellogg Co. plans to acquire Procter & Gamble's Pringles business for $2.7 billion, after P&G’s original plans to sell Pringles to Diamond Foods fell through.
The Diamond Foods transaction fell apart earlier this month, when Diamond revealed that its financial statements, “could not be relied on and would need to be restated.” Diamond also then placed Michael Mendes, its president and ceo, and Steven Neil, cfo, on administrative leave and commenced a search for their permanent replacements.
At the time, P&G released a statement on its website saying it had no idea there were potential problems.
“This is breaking news for us and the information released by Diamond Foods is very disappointing,” the statement reads. “Pringles remains a valuable asset and it has attracted considerable interest from other outside parties.”
However, the company seems happy with the new deal.
"This is an excellent development for P&G, Pringles and Kellogg’s, creating value for our shareholders and representing an outstanding opportunity for Pringles employees with a leading company in the Food sector,” P&G's chairman, president and ceo, Bob McDonald, says in a news release. “Kellogg’s shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg's leadership."
Kellogg’s has established a strong U.S.-based snacks business since its successful acquisition of Keebler more than a decade ago. With the acquisition of Pringles, the company hopes to build a truly global snacks platform and organization for further growth.
Kellogg’s says the acquisition will be extremely beneficial, specifically because:
At the time, P&G released a statement on its website saying it had no idea there were potential problems.
“This is breaking news for us and the information released by Diamond Foods is very disappointing,” the statement reads. “Pringles remains a valuable asset and it has attracted considerable interest from other outside parties.”
However, the company seems happy with the new deal.
"This is an excellent development for P&G, Pringles and Kellogg’s, creating value for our shareholders and representing an outstanding opportunity for Pringles employees with a leading company in the Food sector,” P&G's chairman, president and ceo, Bob McDonald, says in a news release. “Kellogg’s shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg's leadership."
Kellogg’s has established a strong U.S.-based snacks business since its successful acquisition of Keebler more than a decade ago. With the acquisition of Pringles, the company hopes to build a truly global snacks platform and organization for further growth.
Kellogg’s says the acquisition will be extremely beneficial, specifically because:
- Pringles' brand strength and consumer appeal fit well with Kellogg's core strengths in brand-building and innovation, adding a complementary product to its other snacks brands, most notably Keebler, Cheez-It and Special K Cracker Chips.
- In the U.S., the acquisition provides a new source of growth for the company's already strong presence in the snacks category.
- Internationally, Pringles provides a strong brand and an established platform from which Kellogg’s can more aggressively leverage its brands in the international snacks category.
- Kellogg’s will benefit from the collective expertise of more than 1,700 talented Pringles employees.
- The Pringles business enhances the Kellogg Co.'s existing production capabilities with the addition of two manufacturing facilities, one in Tennessee and one in Belgium.
The companies expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
Pringlesis the world's second largest player in savory snacks, with $1.5 billion in sales across more than 140 countries and manufacturing operations in the U.S., Europe and Asia. The stacked potato crisp is known for it unique saddle shape and distinct canister packaging.
For more information about Kellogg’s, visitwww.kelloggcompany.com; for more information aboutPringles, visitwww.pringles.com.
