Diamond Calls Off Pringles Deal; Kellogg Moves In
A surprising twist in the planned sale of Pringles hit this morning when Diamond Foods Inc. called off its acquisition of Procter & Gamble's popular brand.
Diamond Food’s Acting President and Chief Executive Officer Rick Wolford gave no reason for the termination of the deal, but did comment, saying: "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. Diamond now will put its full effort on the growth of our business with focused execution to continue to build our successful brands."
Diamond Foods first announced its intent to buy the Pringles brand from P&G in April 2011. The accreditive combination would have propelled Diamond Foods to become the No. 2 global player in savory snack category.
But Pringles won’t be homeless for long as The Kellogg Company swept in this morning to state its claim on the world's second largest player in savory snacks, with $1.5 billion in sales across more than 140 countries.
In a press release this morning, Kellogg announced that it had entered into an agreement to acquire Procter & Gamble's Pringles business for $2.695 billion.
Kellogg 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 expects to build a truly global snacks platform and organization for further growth.
Highlights of the acquisition include:
• 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.
• 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.
• The companies expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
"We are excited to announce this strategic acquisition," says John Bryant, Kellogg Company's president and chief executive officer. "Pringles has an extensive global footprint that catapults Kellogg to the No. 2 position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company."
P&G's Chairman, President and Chief Executive Officer, Bob McDonald, added, "This is an excellent development for P&G, Pringles and Kellogg, creating value for our shareholders and representing an outstanding opportunity for Pringles employees with a leading company in the Food sector. Kellogg shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg's leadership."
P&G did not comment extensively on the termination of the deal with Diamond Foods other than to say that the prior agreement to sell the Pringles business to Diamond Foods has been mutually terminated.
Diamond Food’s Acting President and Chief Executive Officer Rick Wolford gave no reason for the termination of the deal, but did comment, saying: "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. Diamond now will put its full effort on the growth of our business with focused execution to continue to build our successful brands."
Diamond Foods first announced its intent to buy the Pringles brand from P&G in April 2011. The accreditive combination would have propelled Diamond Foods to become the No. 2 global player in savory snack category.
But Pringles won’t be homeless for long as The Kellogg Company swept in this morning to state its claim on the world's second largest player in savory snacks, with $1.5 billion in sales across more than 140 countries.
In a press release this morning, Kellogg announced that it had entered into an agreement to acquire Procter & Gamble's Pringles business for $2.695 billion.
Kellogg 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 expects to build a truly global snacks platform and organization for further growth.
Highlights of the acquisition include:
• 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.
• 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.
• The companies expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
"We are excited to announce this strategic acquisition," says John Bryant, Kellogg Company's president and chief executive officer. "Pringles has an extensive global footprint that catapults Kellogg to the No. 2 position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company."
P&G's Chairman, President and Chief Executive Officer, Bob McDonald, added, "This is an excellent development for P&G, Pringles and Kellogg, creating value for our shareholders and representing an outstanding opportunity for Pringles employees with a leading company in the Food sector. Kellogg shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg's leadership."
P&G did not comment extensively on the termination of the deal with Diamond Foods other than to say that the prior agreement to sell the Pringles business to Diamond Foods has been mutually terminated.