Kellogg (K) Enters Agreement to Acquire Procter & Gamble's (PG) Pringles for $2.695 Billion
Kellogg Company (NYSE: K) today announced that it has entered into an agreement to acquire Procter & Gamble's (NYSE: PG) Pringles business for $2.695 billion. Pringles is an excellent strategic fit for Kellogg Company. It significantly advances the company's goal of building a global snacks business on par with its global cereal business.
Kellogg has established a strong U.S.-based snacks business since its successful acquisition of Keebler more than a decade ago. With the acquisition of Pringles, the company will build a truly global snacks platform and organization for further growth.
"We are excited to announce this strategic acquisition," said John Bryant, Kellogg Company's president and chief executive officer. "Pringles has an extensive global footprint that catapults Kellogg to the number two position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company. We are delighted to welcome the employees of the Pringles organization to Kellogg. Their collective passion and commitment has resulted in Pringles' well-deserved acclaim as one of the most recognized brands in the world."
Kellogg Company has agreed to pay Procter & Gamble $2.695 billion in cash for the Pringles business. This is before significant future tax benefits.
As a result, Kellogg anticipates increasing its outstanding debt by approximately $2 billion, and expects to limit its share repurchase program to proceeds received by the company from employee option exercises for approximately two years to allow the company to reduce the increased levels of debt.
Kellogg Company's financial performance in 2012 will depend on several factors, including the exact date of closing. However, assuming the transaction closes on or around June 30, 2012, Kellogg expects that the transaction will:
Kellogg Company will discuss the acquisition with analysts and investors during a conference call on Wednesday, February 15, 2012 from 7:45 – 8:30 am ET. The conference call and accompanying presentation slides will be broadcast live over the Internet at http://investor.kelloggs.com. Analysts and institutional investors may participate in the Q&A session by dialing (888) 338-8373 in the U.S., and (973) 872-3000 outside of the U.S. Members of the media and the public are invited to attend in a listen-only mode. A replay of the conference call will be available by dialing (800) 585-8367 in the U.S., and (404) 537-3406 outside of the U.S. with passcode 53030669. The company also plans to update analysts and investors at the Consumer Analysts Group of New York (CAGNY) annual conference on Feb. 22, 2012, and periodically as it completes its further review of the business.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
Kellogg has established a strong U.S.-based snacks business since its successful acquisition of Keebler more than a decade ago. With the acquisition of Pringles, the company will build a truly global snacks platform and organization for further growth.
"We are excited to announce this strategic acquisition," said John Bryant, Kellogg Company's president and chief executive officer. "Pringles has an extensive global footprint that catapults Kellogg to the number two position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company. We are delighted to welcome the employees of the Pringles organization to Kellogg. Their collective passion and commitment has resulted in Pringles' well-deserved acclaim as one of the most recognized brands in the world."
Kellogg Company has agreed to pay Procter & Gamble $2.695 billion in cash for the Pringles business. This is before significant future tax benefits.
As a result, Kellogg anticipates increasing its outstanding debt by approximately $2 billion, and expects to limit its share repurchase program to proceeds received by the company from employee option exercises for approximately two years to allow the company to reduce the increased levels of debt.
Kellogg Company's financial performance in 2012 will depend on several factors, including the exact date of closing. However, assuming the transaction closes on or around June 30, 2012, Kellogg expects that the transaction will:
- Be accretive to earnings in 2012 by between $0.08 and $0.10 per share before the impact of transaction and one-time costs and changes to the share repurchase program; including these items, the transaction will be dilutive to earnings per share in 2012 by between $0.11 and $0.16 per share.
- Generate one-time costs of between $160 million and $180 million. The company expects that between $70 million and $90 million of these costs will be recognized in 2012, a lesser amount in 2013, and the remainder in 2014.
- Generate synergies of at least $10 million in 2012, more in 2013 and ongoing synergies of between $50 million and $75 million a year thereafter.
Kellogg Company will discuss the acquisition with analysts and investors during a conference call on Wednesday, February 15, 2012 from 7:45 – 8:30 am ET. The conference call and accompanying presentation slides will be broadcast live over the Internet at http://investor.kelloggs.com. Analysts and institutional investors may participate in the Q&A session by dialing (888) 338-8373 in the U.S., and (973) 872-3000 outside of the U.S. Members of the media and the public are invited to attend in a listen-only mode. A replay of the conference call will be available by dialing (800) 585-8367 in the U.S., and (404) 537-3406 outside of the U.S. with passcode 53030669. The company also plans to update analysts and investors at the Consumer Analysts Group of New York (CAGNY) annual conference on Feb. 22, 2012, and periodically as it completes its further review of the business.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
You May Also Be Interested In
- UPDATE: Angelo, Gordon to Acquire Benihana (BNHN) for $16.30/Share in Cash
- DryShips (DRYS) Trading Higher on Volatility, New Analyst Coverage
- UPDATE: Eaton (ETN) to Buy Cooper Industries (CBE) in Cash, Stock Deal Valued at $72/Share
Create E-mail Alert Related Categories
Corporate News, Hot M&A, Mergers and Acquisitions, Momentum Movers, Trader TalkRelated Entities
Stock Buyback, EarningsComments
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
Fast Loan Approval
pearlcarbajal on Feb 15, 2012 07:28 AMMark as Spam
This post is awesome..i've been reading tons of crap posts from other blogs, but shows you have a more educated reader base.
http://www.onlinecheck.com/business_loans.html