Post Holdings has struck a deal to acquire fellow US breakfast cereal manufacturer MOM Brands for around US$1.15bn.

Announcing the deal, Post said  the integration of MOM’s portfolio of value and hot ready-to-eat cereal brands will cement its position as the third-largest cereal maker in the US. Quoting Nielsen data, Post said that the acquisition would increase its market share to 18% of dollar sales in the country.

MOM brands CEO Chris Neugent will continue to lead the MOM Brands business, reporting to Richard Koulouris, who is joining Post from US private-label supplier Ralcorp Holdings, part of ConAgra Foods.

Neugent said the combination of the two businesses would better equip the enlarged group to navigate the challenging US cereal category. “By joining forces with Post, we will have more resources available to innovate, extend our brands and expand distribution. We believe that this new, combined enterprise will be uniquely positioned to help our customers find new solutions in the highly competitive cereal category,” he said.

The move is subject to regulatory approval and is expected to close in the third quarter of 2015.

Under the terms of the agreement, Post will pay $1.05bn in cash and issue the current owners of MOM Brands approximately 2.45m shares of Post common stock.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The company said it expects the acquisition to be immediately accretive to adjusted EBITDA margin and free cash flow. The tie-up is expected to generate approximately US$50m in run-rate cost synergies by the third full fiscal year.