Diamond Foods Buying Pringles from P&G for $1.5B
Diamond Foods Buying Pringles from P&G for $1.5B
Diamond Foods Buying Pringles from P&G for $1.5B
Diamond Foods Inc. is acquiring the Pringles potato chip brand from Procter & Gamble Co. in a $1.5 billion stock transaction designed to minimize the tax bite for P&G.
The deal, in which Diamond Foods will issue stock to P&G and also assume $850 million in Pringles debt, will more than triple the size of Diamond's snack business.
Diamond Foods has been growing rapidly through acquisitions. Last year it doubled in size with another foray into chips, its $615 million acquisition of premium potato-chip maker Kettle Foods. It other brands include Diamond of California and Emerald nuts and Pop Secret popcorn.
The share issuance will make P&G the holder of 57% of Diamond's stock.
The Kettle acquisition has bolstered Diamond's results in recent quarters, although growth hasn't always been as strong as some analysts expected.
Tuesday, Diamond gave a relatively cautious 2012 earnings forecast for its core business, predicting a per-share profit of $2.85 to $2.98, compared with the $2.98 average estimate of analysts polled by Thomson Reuters.
Assuming the Pringles deal closes by the end of the current calendar year, it forecast adjusted earnings per share of $3 to $3.10 on $1.8 billion in net sales for its 2012 fiscal year.
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