Sector News

Post to Acquire MOM Brands in $1.15 Billion Cereal Merger

January 26, 2015
Food & Drink
Post Holdings Inc. has agreed to buy privately-held MOM Brands Co. for $1.15 billion in a deal that will add Berry Colossal Crunch and Frosted Mini Spooners to Post’s trove of cereal brands.
The deal came as Post gave a better-than-expected outlook for its December quarter on strength in its ready-to-eat cereal and egg, cheese and potato segments.
Under the terms of the deal, Post will pay MOM $1.05 billion in cash and issue its owners 2.45 million shares of Post stock.
St. Louis-based Post has been on a spending spree to diversify its business since its spinoff from Ralcorp Holdings Inc. in 2012, as Americans are eating less cereal in favor of lower-carbohydrate breakfasts that they can consume on the go.
Last year, Post bought PowerBar and Musashi brands and private label peanut butter maker American Blanching Co.
The deal with MOM will add hot cereals and ready-to-eat cereals such as Golden Puffs and Cinnamon Toasters to Post’s Honey Bunches of Oats, Grape-Nuts and Honeycomb cereals.
“For Post, this is the right move, at the right price, in the right category,” said Post Chief Executive Rob Vitale in a news release. “After a century of spirited rivalry between MOM Brands and Post, we now look forward to combining our strengths.”
Post said it expects to record $50 million in run-rate cost synergies in the third full year after closing by sharing administrative services, infrastructure and a sales force. The deal is expected to close by the third quarter.
For its fiscal first-quarter ended Dec. 31, Post on Monday said it expects to post sales of $1.07 billion, coming in just above Wall Street expectations. The company also reaffirmed its full-year outlook.
By Chelsey Dulaney 

Related News

September 21, 2020

Alpro announces 30m euro investment and new sustainability goals

Food & Drink

Alpro has unveiled a new five-year health and sustainability action plan, as well as plans to invest €30m in two of its production sites. The objectives laid out by the company, […]

September 18, 2020

Cargill to advance regenerative agriculture practices across 10m acres of farmland

Food & Drink

Cargill has announced that it is supporting farmer-led efforts to adopt regenerative agriculture practices on 10 million acres of crop land in North America by 2030. The initiative will focus primarily […]

September 17, 2020

PepsiCo pilots invisible digital watermark technology to boost recycling

Food & Drink

PepsiCo is trialling products encoded with invisible digital watermarks for more effective recycling. The technology is pegged as the “holy grail” that will make mechanical sorting more efficient. The beverage […]