The company says the acquisition of Pringles will put its snacks business, which consists mainly of US brands such as Keebler and Cheez-It, on par with its cereal business consisting of global brands such as Cornflakes and Special K. Pringles is said to be world’s second biggest savoury snack brand with $1.5bn (£955m) in annual sales.
In a statement, Kellogg president and chief executive officer John Bryant said the deal “catapults Kellogg to the number two position in the worldwide savoury snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company.”
The sale agreement allows Procter & Gamble to leave the food business to focus on its portfolio of FMCG products. A previous $2.4bn (£1.52bn) deal with Diamond Foods fell apart following the announcement that Diamond was to restate its financials in the wake of an internal inquiry into its accounting practises. P&G subsequently announced it was reconsidering the sale.
In a separate statement, P&G chief executive Bob McDonald welcomed the deal. He adds: “Kellogg’s shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg’s leadership.”
The deal is expected to be completed by the end of the summer, pending regulatory approval.