The businesses said yesterday (1 June) they had completed a transaction priced at US$85m. Under the terms of the deal, Post will acquire two factories – one in Ohio and another in Nevada – as well as an R&D facility in Illinois.
The deal comes a year after a transaction between the two companies was pulled amid opposition from US competition officials.
In May 2019, Post and TreeHouse struck a deal over the latter’s ready-to-eat cereal assets. Seven months later, the US Federal Trade Commission announced the transaction would hit competition and said it would take legal action to block the deal.
In January 2020, in response to the FTC’s opposition, Post walked away from the planned deal, a decision with which TreeHouse said at the time it “mutually agreed”.
TreeHouse then moved to look for alternative buyers. Announcing the latest deal with Post, Steve Oakland, TreeHouse’s CEO and president, said: “Based on our thorough efforts to find alternative buyers for the business, we believe this transaction is not only in the best interest of its employees and customers, but also gives the business the opportunity to flourish as part of Post.”
Just Food has contacted the FTC for comment.
Asked if any elements of the new transaction are different from the deal opposed by the FTC, a spokesperson for Post replied: “Effective Tuesday, June 1, 2021, Post Consumer Brands has acquired the private label cereal business of TreeHouse Foods. Simply put, this deal is a win-win – protecting jobs and capacity at a time of strain due to the ongoing pandemic and increasing commodity prices.”
In February, New York-based hedge fund Jana Partners revealed it had bought a stake in TreeHouse. Jana said at the time it bought the stake because it considers TreeHouse’s shares were “undervalued”. It had been pushing for change at the company, partly through the nomination of new board members but also suggesting the business could be sold.
A month later, TreeHouse agreed to add two new independent directors to its board after discussions with Jana.