USA: General Mills completes acquisition of Pillsbury
General Mills (NYSE: GIS) said yesterday that it has completed the acquisition from Diageo plc (LSE:DGE; NYSE:DEO) of its worldwide Pillsbury operations in a transaction valued at $10.4 billion. Under terms of the final agreement between General Mills and Diageo, General Mills will acquire Pillsbury in a stock and cash transaction. Consideration to Diageo includes 134 million common shares of General Mills, valued at $44 per share. The total transaction value also includes cash and assumed debt of up to $4.5 billion, of which $670 million may be paid to Diageo in whole or in part on the eighteen-month anniversary of the deal closing, depending on General Mills stock price at that time and the number of General Mills shares Diageo continues to hold on the 18-month anniversary date. If the General Mills stock price is less than $49 per share at the 18-month anniversary, Diageo will receive an amount per share equal to the difference between $49 and the actual General Mills stock trading price, up to a maximum of $5 per share that Diageo owns at the anniversary date. As part of the final shareholder agreement, Diageo has an option to sell directly to General Mills 55 million shares of General Mills common stock at a price of $42.14 per share.
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