Blog: Dean BestKellogg's ambitious move for Pringles

Dean Best | 15 February 2012

In a deal that raised eyebrows, Kellogg has agreed to buy Pringles for US$2.7bn.

Kellogg moved to buy Pringles after Diamond Foods' deal to acquire the snacks brand was terminated in the wake of the accounting scandal at the company.

The US cereal giant believes Pringles will bolster its snacks business at home and abroad, adding to a stable of crackers and cereal bars in the US but also giving it access to the Asian snacks market and giving it more scale in Europe and Latin America. And investors seemed to approve of the deal, with Kellogg's shares up over 5%.

However, as we report today, challenges lie ahead for Kellogg both within its prospective new business and its core operations. Pringles' sales have suffered in some markets in recent months; in PepsiCo, the company will be up against a competitor with seven of the other top ten savoury snacks brands and one that is looking to bounce back from a bruising year; and the Frosties maker is operating in very challenging cereal markets on both sides of the Atlantic.


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