BATTLE CREEK — Kellogg Company today announced that it has entered into an agreement to acquire Procter & Gamble’s Pringles business, Pringles, for $2.695 billion. Pringles is a strategic fit for Kellogg Company. It significantly advances the company’s goal of building a global snacks business on par with its global cereal business.
The companies expect to complete the transaction in the summer of 2012, pending necessary regulatory approvals.
“We are excited to announce this strategic acquisition,” said John Bryant, Kellogg Company’s president and chief executive officer. “Pringles has an extensive global footprint that catapults Kellogg to the number two position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company. We are delighted to welcome the employees of the Pringles organization to Kellogg. Their collective passion and commitment has resulted in Pringles’ well-deserved acclaim as one of the most recognized brands in the world.”
P&G’s Chairman, President and Chief Executive Officer, Bob McDonald, added, “This is an excellent development for P&G, Pringles, and Kellogg, creating value for our shareholders and representing an outstanding opportunity for Pringles employees with a leading company in the Food sector. Kellogg shares similar values and principles to us and we are confident that the Pringles business will thrive under Kellogg’s leadership.”
Pringles is the world’s second largest player in savory snacks, with $1.5 billion in sales across more than 140 countries and manufacturing operations in the U.S., Europe and Asia. The stacked potato crisp has been a mainstay in supermarket snack aisles for more than four decades and is identified by its unique saddle shape and distinct canister packaging.
The Pringles business enhances Kellogg Company’s existing production capabilities with the addition of two manufacturing facilities, one in Tennessee and one in Belgium.
Kellogg Company has agreed to pay Procter & Gamble $2.695 billion in cash for the Pringles business. This is before significant future tax benefits.
As a result, Kellogg anticipates increasing its outstanding debt by approximately $2 billion, and expects to limit its share repurchase program to proceeds received by the company from employee option exercises for approximately two years to allow the company to reduce the increased levels of debt.