Kellogg Company (NYSE:K) has announced that it has completed the acquisition of the Pringles Brand from Proctor & Gamble (NYSE:PG). The 2.7 billion dollar acquisition which was announced in February of this year will reduce Kellogg’s earnings per share by as much as 16 cents this year.
The Pringles purchase pushes Kellogg’s into the world number two slot in terms of savoury snacks behind Pepsi Co’s (NYSE:PEP) juggernaut Frito-Lay and increases the company’s international snacks business threefold.
Kellogg’s 2.7 billion dollar cash bid was nearly twice that of the 1.5 billion stock bid put forth by Diamonds Foods (Nasdaq:DMND) in April of last year. The worldwide exposure of Pringles gives the Kellogg Company a vehicle to penetrate the international market with its Nutri-Grain and Pop Tarts brands and various cereal bars.
Kellogg’s closed down 1.18% to 48.78 on Thursday, outpacing the Dow Jones Industrial Average by 0.78%.
Foodbeat’s Take: With wheat and corn commodity prices down 24.8% and 11.1% respectively over the last 12 months look for increasing margins at Kellogg Company.
Sources: Newswire.ca, Bloomberg