ADVERTISEMENT

ADVERTISEMENT

Kellogg in talks to buy Diamond Foods for $1.5 billion

Kellogg Co <K.N>, which makes Corn Flakes and Rice Krispies, is in late-stage talks to buy snack foods company Diamond Foods Inc <DMND.O> for more than $1.5 billion, the New York Post reported on Friday, citing unnamed sources.

2095040+tag-reuters.jpg
Kellogg's Corn Flakes cereal is pictured at a Ralphs grocery store in Pasadena, California Aug. 3, 2015. REUTERS/Mario Anzuoni

Kellogg Co <K.N>, which makes Corn Flakes and Rice Krispies, is in late-stage talks to buy snack foods company Diamond Foods Inc <DMND.O> for more than $1.5 billion, the New York Post reported on Friday, citing unnamed sources.

Kellogg could pay $35 to $40 a share for Diamond, the newspaper reported. Diamond's shares rose 8.6 percent to $35.66, their highest in more than three years. ( http://bit.ly/1NXGKhJ )

Kellogg and Diamond Foods declined to comment on the report.

Diamond Foods makes Kettle potato chips and Pop Secret popcorn. The company has hired Credit Suisse to explore a sale, news and data service Dealreporter wrote in September. ( http://bit.ly/1Lb9ZwQ )

San Francisco-based Diamond has struggled to boost sales this year. Revenue has missed analysts' estimates in each of the last four quarters and the company this year exited a low-margin nut products business.

ADVERTISEMENT

Kellogg, meanwhile, has been trying to expand its snack foods business through acquisitions and to increase its international presence as breakfast cereal sales decline in the United States.

It bought Egyptian baker Bisco Misr in January and entered into a distribution deal to expand in Africa.

Diamond's biggest shareholders are hedge fund Oaktree Capital Management, with a 14 percent stake, and BlackRock Institutional Trust Co, with a stake of nearly 7 percent.

Kellogg's shares were little changed in early trading.

Related Topics: WABASHA-KELLOGG
What To Read Next
This week on AgweekTV, we hear about North Dakota corporate farming legislation and about WOTUS challenges. Our livestock tour visits a seedstock operation and a rabbit farm. And we hear about new uses for drones.
Kevin and Lynette Thompson brought TNT Simmental Ranch to life in 1985. Now, their daughter, Shanon Erbele, and her husband, Gabriel, are taking over the reins, and their sale is for Feb. 10.
Gevo will be making sustainable aviation fuel in Lake Preston, South Dakota. Summit Carbon Solutions plans to capture carbon emissions from the facility.
Even if it's not a lucrative venture, the hobby of raising rabbits continues at this farm near Sebeka, Minnesota.