Pringles Separates from Proposed Parent Diamond and Connects with Kellogg
02/15/2012 – Today, ten months after the original deal was struck between Diamond Foods, Inc. (Nasdaq:DMND) ("Diamond") and The Procter & Gamble Company (NYSE:PG) ("P&G"), and after months of internal audits at Diamond culminating in severe steps by the company’s board of directors a week ago, which included the dismissal of Diamond’s CEO and CFO, the two companies have agreed to release each other from all liabilities related to the proposed acquisition. No "break-up" or other fees will be paid in connection with the termination.
"Diamond has enjoyed a positive and constructive working relationship with P&G throughout this process, and the mutual termination of our agreement and release of all associated liabilities was reached in the same spirit," said Rick Wolford, Diamond Foods' Acting President and Chief Executive Officer. "Diamond now will put its full effort on the growth of our business with focused execution to continue to build our successful brands."
With a clean cut from Diamond, P&G announced its intention to sell the Pringles business to Kellogg Company (NYSE: K) (“Kellogg”) in a $2.695 billion all-cash transaction that is expected to complete this summer. Final timing will be dependent upon receiving all necessary regulatory approvals.
“Guided by what is best for shareholders and employees, we believe this agreement with Kellogg presents an exciting new future for our snacks business,” said P&G Chairman of the Board, President and CEO Bob McDonald.
According to Kellogg, highlights of the acquisition include:
- Kellogg will benefit from the collective expertise of more than 1,700 talented Pringles employees. The similar heritage, culture and values of Kellogg and P&G are expected to facilitate a smooth transition.
- 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 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 can more aggressively leverage its brands in the international snacks category.
The companies expect to complete the transaction around June 30, 2012, pending necessary regulatory approvals.
"We are excited to announce this strategic acquisition," said John Bryant, Kellogg Company's President and Chief Executive Officer. "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. We are delighted to welcome the employees of the Pringles organization to Kellogg. Their collective passion and commitment has resulted in Pringles' well-deserved acclaim as one of the most recognized brands in the world."
According to Euromonitor, Pringles is 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 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.
The Pringles business enhances Kellogg Company's existing production capabilities with the addition of two world-class manufacturing facilities, one in Tennessee and one in Belgium.
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