Diamond Foods Acquires Pringles for $2.35B

April 5, 2011

2 Min Read
Diamond Foods Acquires Pringles for $2.35B

SAN FRANCISCODiamond Foods Inc. has signed a $2.35-billion definitive agreement to merge the Pringles® line of snacks from Procter & Gamble Co. The deal would more than triple the size of Diamond's snack business and make it the second-largest global snack company.

Pringles will join Diamond's portfolio of brands, including Diamond of California® and Emerald® nuts, Pop Secret® microwave popcorn and Kettle Brand® potato chips, creating a premium snack-focused company with total revenues of approximately $2.4 billion.

The Pringles acquisition will allow Diamond Foods to increase scale in U.S. grocery, mass merchandise, drug and convenience channels to gain greater merchandising and distribution influence; leverage Diamond's sales and distribution infrastructure through a more than doubling of snack sales in the U.S. and U.K., which are Pringles' two largest markets; gain a broader global manufacturing and supply chain platform, with access into key growth markets around the world, including Asia, Latin America and Central Europe; and increase Diamond's geographic diversity, with international sales accounting for approximately 49 percent of total revenues on a pro forma basis.

"Pringles is an iconic, billion-dollar snack brand with significant global manufacturing and supply chain infrastructure," said Michael J. Mendes, chairman, president and CEO of Diamond Foods. "Our plan is to build upon the brand equity Pringles has established in over 140 countries. This strategic combination will create an independent, global leader in the snack industry with a focus on quality and innovative products. Not only is this combination immediately accretive, it also creates a platform that we believe will allow us to build shareholder value for years to come."

The transaction is comprised of $1.5 billion in Diamond common stock, consisting of 29.1 million shares for approximately 57 percent of the outstanding shares of the combined company, and the assumption of $850 million of Pringles debt. Diamond's existing shareholders would continue to own approximately 43 percent of the combined company.

The combined business will be managed by Diamond's executive team and board of directors, led by Michael J. Mendes, Chairman, President and CEO.  The company's headquarters will remain in San Francisco. The transaction is subject to approval by Diamond shareholders and the satisfaction of customary closing conditions and regulatory approvals. The transaction is expected to be completed by the end of calendar 2011.

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