Kellogg Company to Acquire Pringles For $2.7 Billion
Kellogg Company has agreed to acquire Procter & Gamble’s Pringles business for $2.695 billion. Pringles is an excellent strategic fit for Kellogg and significantly advances the company’s goal of building a global snacks business on par with its global cereal business.
Pringles is the world’s second largest player in savoury snacks, with $1.5 billion in sales across more than 140 countries and manufacturing operations in the US, Europe and Asia. The stacked potato crisp has been a mainstay in supermarket snack aisles for more than four decades and is immediately identified by snack lovers worldwide by its unique saddle shape and distinct canister packaging.
Kellogg has established a strong US-based snacks business since its successful acquisition of Keebler more than a decade ago. With the acquisition of Pringles, the company will build a truly global snacks platform and organisation for further growth.
Pringles’ brand strength and consumer appeal fit well with Kellogg Company’s core strengths in brand-building and innovation, adding a complementary product to its high-quality snacks brands, most notably Keebler, Cheez-It and Special K Cracker Chips. In the US, 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 can more aggressively leverage its brands in the international snacks category. Kellogg will benefit from the collective expertise of more than 1,700 Pringles employees.
Kellogg and P&G expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
“Pringles has an extensive global footprint that catapults Kellogg to the number two position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company,” says John Bryant, president and chief executive of Kellogg Company.
US-based snack foods group Diamond Foods had agreed to acquire Pringles from Procter & Gamble in April 2011. However, the $2.35 billion deal, which was expected to close in December 2011, was deferred following the decision to investigate an accounting irregularity at Diamond Foods. This investigation recently resulted in Diamond Foods announcing that its financial statements for 2010 and 2011 could not be relied on and would need to be restated. It also placed its president and chief executive, Michael Mendes, and chief financial officer, Steven Neil, on administrative leave and commenced a search for their permanent replacements.
