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September 20, 2010

US: P&G “rejects Diamond Foods’ Pringles merger plan”

Procter & Gamble (P&G) has reportedly turned down a proposal to merge its snacks business Pringles with US snack maker Diamond Foods.

Procter & Gamble (P&G) has reportedly turned down a proposal to merge its snacks business Pringles with US snack maker Diamond Foods.

According to a report from Bloomberg on Friday evening (17 September), P&G was in talks with Diamond but stopped negotiations amid concern about how the potential deal was structured.

Bloomberg said the two companies were in talks over a “spin merger” that would have given P&G the chance to sell Pringles in a tax-free merger, while giving investors in the US consumer goods giant a majority stake in Diamond.

However, P&G was said to be concerned that a majority stake with a just small number of shares in the combined business outstanding would make it harder for investors to sell the remaining shares.

The CEO of Diamond Foods last month said he is planning aggressive growth and is expecting the company’s net income to grow 20% on average each year over the next five years.

A deal with P&G would have added the Pringles brand to Diamond’s portfolio, which includes Emerald nuts and Pop Secret Popcorn, as well as the Kettle chips brand it purchased earlier this year.

Diamond Foods declined to comment on the reports, while officials at P&G could not be reached for immediate comment.

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