Kellogg's buys chips Pringles from Procter & Gamble
Kellogg's takes its revenge. After being out of the game last year, the world's leading cereal offers Pringles potato chips, for $ 2.7 billion. It takes advantage of misadventures of the seller, Procter & Gamble (P & G), which had entered into negotiations in April 2011 with fellow American Diamon Foods for the sale of Pringles.
These negotiations were unsuccessful, the purchaser being mired in a huge accounting scandal. Within months, the stock price Diamond Foods has lost half its value. But the company had committed to spend $ 2.4 billion, mainly in equities, to get their hands on Pringles. In early January, Diamond Foods announced it would need to reassess its accounts the past two years, following an internal investigation into its accounting practices. Hours later, P & G said look for an alternative.
Kellogg's and P & G should complete the operation by the summer. The withdrawal of Diamond Foods will not result in financial compensation for P & G.
By offering the brand of chips, which generates about $ 1.5 billion in sales and employs 1,700 people, Kellogg's is a giant step for the future. "Pringles has a global presence that propels to Kellogg's second in the world of crackers, helping us achieve our goal of becoming a real business of cereals and snacks," says John A. Bryant, CEO of Kellogg's, which topped last year's $ 13 billion in revenue.
PepsiCo, the leader
Sold in over 140 countries, produced in Belgium and the U.S., the Pringles potato chips become the second brand of Kellogg's Special K behind The U.S. giant has already Keebler cookies and crackers and Cheez-It Townhouse. The group also sells cereal bars and fruit snacks. But he has to go up a gear abroad.
"The acquisition of Pringles it provides a platform for international distribution of its products ready for snacking," analysts said BernsteinResearch. This should lead to synergies, particularly in Asia, where Kellogg's is still low.
Dominated by PepsiCo, the snack market, with sales approaching $ 65 billion, grew twice as fast in the last five years in emerging markets (+9.6% on average) than in mature markets. The sale of Pringles brand disengagement of P & G's food, a segment where the world's leading consumer products had tried to diversify in the 1990s. In 2004, he had already sold its Sunny Delight juice. It intends to focus on cosmetics, personal care and cleaning products.
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