Kellogg spending $2.7 billion cash on Pringles

Kellogg will buy the Pringles chips business from P&G for $2.7 billion.

By msnbc.com news services

Kellogg said on Wednesday it plans to buy the Pringles chips business from Procter & Gamble for $2.7 billion in cash.

P&G had originally agreed to sell Pringles to Diamond Foods, but the deal fell through because of postponements caused by a U.S. investigation into Diamond Foods’ accounting practices.

Kellogg’s CEO John Bryant appeared on CNBC Wednesday to discuss the deal.

By purchasing the Pringles chips business, Bryant said Kellogg will become the world’s second largest snack company, adding to its strength in the cereal business, where it is the world’s number-one player.

“This is a critical acquisition for Kellogg,” he said. “It nearly triples the international size of our snack business, and it’s an important addition to our U.S. business.”

Bryant added that the popularity of the Pringles brand outside the U.S. gives Kellogg an opportunity to market its other snack products alongside the chips in supermarkets and food stores.

Pringles has about $1.5 billion in annual sales. About 1,700 employees will move to Kellogg in the deal, which the companies expect to complete by the summer of 2012.