Quaker, a subsidiary of US food and beverages giant PepsiCo, has sold its bagged cereal business to US cereal manufacturer Malt-O-Meal, in order to concentrate on its larger, more profitable boxed cereal brands.

PepsiCo subsequently reaffirmed that it expects to achieve its previously stated targets of 13-14% earnings per share growth for the fourth quarter and full year 2002.

For the full year 2002, bagged cereals are expected to account for about 5% of Quaker's North America food revenues.