Cereal giant Kellogg Company has announced it is to buy Procter & Gamble’s snack brand Pringles.
It has agreed to pay $2.7bn (£1.72bn) for the business, which it described as an “excellent strategic fit” that would help it build a global snacks platform. Kellogg already produces snack brands including Keebler, Cheez-It and Special K Cracker Chips.
Pringles was set to be sold to US snack supplier Diamond Foods until last week. But the deal was cast into doubt by an internal investigation that identified “material weaknesses” in Diamond’s financial reporting, prompting the departure of the company’s chief executive and chief financial officer.
At the time, P&G said it would re-evaluate the sale following the announcement, adding that Pringles had attracted “considerable” interest from other parties.
P&G chief executive Bob McDonald today said the Kellogg deal would create value for P&G shareholders and represented an outstanding opportunity for Pringles employees.
“Kellogg’s shares similar values and principles to us and we are confident the Pringles business will thrive under its leadership,” McDonald said.
Pringles had an extensive global footprint and would take Kellogg to the number two position in the worldwide savoury snacks category, said Kellogg president and chief executive John Bryant.
Pringles is worth more than $1.5bn in annual sales across more than 140 countries and is manufactured in the US, Europe and Asia.
The deal is expected to complete this summer pending regulatory approval.
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