(Reuters) – Kellogg Co, which makes Corn Flakes and Rice Krispies, is in late-stage talks to buy snack foods company Diamond Foods Inc 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.
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.
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.
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.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Robin Paxton)
Cécile Béliot has assumed the role of Bel Group chief executive officer, following the decision to separate the roles of chairman and CEO. The separation of the functions will enable Bel Group to develop in three areas of healthy snacking. Meanwhile, the company’s former CEO, Antoine Fiévet, has had his mandate renewed as chairman of the board.
US Food and Drug Administration (FDA) Commissioner Dr. Robert Califf was grilled by lawmakers during a House Appropriations subcommittee hearing, where he was slammed over the agency’s handling of the escalating infant formula shortage.
Sweegen is ramping up its efforts to reduce sugar across F&B applications while simultaneously tapping into the benefits of using antioxidants and bitter blocking technology. Speaking to FoodIngredientsFirst, Casey McCormick, vice president of global innovation at Sweegen, says product developers can find a broad range of solutions in Sweegen’s nature-based sweetener systems as brands elevate better-for-you foods.
