American cereal producer Kellogg has bought Pringles snacks from Procter & Gamble for 2 billion euro, after the previous acquisition contract with Diamond Foods was terminated because of the latter's 'creative accounting'.
Financial scandal at Diamond Foods
Last April, P&G and nut producer Diamond Foods agreed for Pringles snacks to change hands, with P&G receiving 2.4 billion dollar (1.7 billion euro) in Diamond-shares and becoming the company's majority shareholder.
This deal however was cancelled as it became apparent Diamond Foods had deliberately included large payments in other fiscal periods to influence financial figures. As a result, specialists had to review two complete fiscal years in order to 'clean' the results and Diamond Food's share price fell sharply – effectively causing a considerable decrease in the acquisition price.
Kellogg to the rescue
Enter Kellogg, which has now stepped up to buy Pringles in order to reach “the number two position in the worldwide savory snacks category”, said Kellogg's CEO John Bryant, who hoped the new acquisition would help Kellogg to “achieve our objective of becoming a truly global cereal and snacks company.”
Kellogg is said to pay 2.7 billion dollar (2 billion euro) for the Pringles brand and its two production units (Mechelen, Belgium and Jackson, Tennessee), almost twice the 1.15 billion euro in yearly turnover Pringles realises worldwide in 140 countries. The sale should be completed this summer, if the competition authorities agree to it.