US cereal group Post Holdings has confirmed plans to close its plant in Modesto in California having concluded talks with unions.

The company announced it was planning to close the facility last month, when it said the move would boost efficiency and better position the company for future growth.

The company said it will incur costs of US$29.8m associated with the transfer of production to other facilities. Excluding these costs, Post expects to generate annual savings of $14m a year.

“These actions are intended to allow for reinvestment in Post’s business and to better position Post to compete in today’s competitive landscape,” the company said.