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Pringles And Kellogg’s Deal Delivers Another Snack Giant

At a price tag of only $2.7 billion, Kellogg became the new owner of the delicious salty snacks Pringles, throwing Diamond Foods out of the battle with a better price. The Pringles – Kellogg deal sets the foundation for yet another snack giant and competition should prepare to withstand it.

Diamond Foods announced on Wednesday it had “mutually agreed” with Pringles to drop its bid for a $2.35 billion acquisition. But, Kellogg simply could not stay away from such a good deal. The Cheez-It crackers, Keebler cookies and Special K crackers producer bought the Pringles potato chips from Procter & Gamble in a $2.7 billion deal.

With sales worth $1.5 billion a year, Pringles was “an irresistible asset at a good price”, as Kellogg’s CEO John Bryant told reporters. He confessed the company “move very quickly” on the deal, as soon as it heard news that Diamond Foods was having second thoughts on the matter.

Bryant added that the Pringles deal “is a great business that helps us create an even better global snacks business”. By buying Pringles, Kellogg has now become the second snack food company in the world, with annual sales estimated to top $63 billion and even more.

Timothy Ramey is a food industry analyst at D.A. Davidson & Co and is commonly following Diamond Foods’ performance. In his opinion, Pringles fits better with Kellogg than with Diamond Foods. To be fair, snacks and cereals fit better together, than walnuts…

Ramey added that “perhaps Kellogg will consider buying Diamond after the financial restatements have been filed and the air clears from the recent accounting issues”. An idea that crossed Bryant’s mind also. He told Reuters that Diamond Foods are “clearly a fit in the portfolio”.
 
The deal means that Kellogg will have 1,700 new employees to coordinate. As company spokesperson Kris Charles said, Kellogg is looking forward to Pringles’ employees and is “excited about the opportunity to together grow our business”.

Of the total 1,700, only 150 will relocate to Battle Creek from Cincinnati, sometime in the next two years. Charles added: “We realize that business, organization and personal considerations will drive timing specifics and expect to know more about staffing requirements in the near future”.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at Eli.Wads@dailygossip.org

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