Deal to Merge P&G's Pringles with Diamond Foods Falls Apart (PG, DMND)
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Price: $162.60 --0%
Overall Analyst Rating:
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Dividend Yield: 2.6%
Revenue Growth %: +0.5%
Overall Analyst Rating:
NEUTRAL (
Up)Dividend Yield: 2.6%
Revenue Growth %: +0.5%
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According to a report from Bloomberg earlier, Proctor & Gamble Co. (NYSE: PG) saw talks to merge its Pringles unit with Diamond Foods Inc. (NASDAQ: DMND) break down last month amid concerns about the structure of the deal.
The report, citing people familiar with the matter, noted that the Board of Director at P&G voted against the deal sometime during August. The deal would have been worth $1.5 billion; with Diamond Foods trading around $41.85 today, the company's market value currently comes in at about $900 million.
The merger would have brought the Pringles chips unit to Diamond’s line up of snacks which include Emerald nuts and Pop Secret popcorn. Earlier this year, Diamond bought Kettle Foods for $615 million.
The move would have allowed P&G to transition out of food brands, letting the company push toward expanding health and beauty sales in the all-important emerging markets. P&G was concerned that it would have had a majority stake in Diamond-Pringles, while having a small number of shares outstanding.
“It isn’t clear if negotiations between P&G and Diamond could be restarted, these people said, adding P&G may decide to hold onto Pringles for at least several months while it tries to fix the unit,” the Bloomberg report said.
P&G has attempted to unload its Pringles unit before, as it considers the brand a non-core asset, Bloomberg's sources suggested.
Shares of Proctor & Gamble are down 14 cents to $60.97 in late market movement, while shares of Diamond are up 18 cents to $41.84.
The report, citing people familiar with the matter, noted that the Board of Director at P&G voted against the deal sometime during August. The deal would have been worth $1.5 billion; with Diamond Foods trading around $41.85 today, the company's market value currently comes in at about $900 million.
The merger would have brought the Pringles chips unit to Diamond’s line up of snacks which include Emerald nuts and Pop Secret popcorn. Earlier this year, Diamond bought Kettle Foods for $615 million.
The move would have allowed P&G to transition out of food brands, letting the company push toward expanding health and beauty sales in the all-important emerging markets. P&G was concerned that it would have had a majority stake in Diamond-Pringles, while having a small number of shares outstanding.
“It isn’t clear if negotiations between P&G and Diamond could be restarted, these people said, adding P&G may decide to hold onto Pringles for at least several months while it tries to fix the unit,” the Bloomberg report said.
P&G has attempted to unload its Pringles unit before, as it considers the brand a non-core asset, Bloomberg's sources suggested.
Shares of Proctor & Gamble are down 14 cents to $60.97 in late market movement, while shares of Diamond are up 18 cents to $41.84.
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