After announcing in February that it would acquire potato chip business Pringles for US$2.7 billion, Kellogg’s received clearance for its acquisition by the European Commission.
The sale not only adds Pringles to the Kellogg’s store cupboard, it also closes at chapter of the Proctor & Gamble consumer goods business. P&G has been trying to find a buyer for Pringles, its last remaining food business, for several years. A similar deal was agreed by P&G to sell Pringles to Diamond Goods, however this fell through after the US Securities and Exchange Commission opened an investigation into the accounting of the deal.
There is no great overlap between Pringles’ and Kellogg’s operation in the European market. However as with the previous unsuccessful deal, US authorities may take a closer look, since Kellogg’s currently competes against Pringles in the salty snacks market in the US. If the transaction goes through, Kellogg’s will be the world’s second largest producer of savoury snacks after PepsiCo. The deal closed at the end of May 2012.
