The deal comes as another step in Kellogg’s attempts to diversify its product portfolio outside of cereal and breakfast foods, according to a Reuters report on the deal. As of October 31, 2014, the Company’s deal to Wal-Mart Stores, Inc., which comprises sales to both Sam’s Club and Walmart, accounted for approximately 16.5% of its net sales. Diamond was valued at about $1.1 billion as of Friday’s close, with a price-to-earnings ratio of 28.4.
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Kellogg was founded in Michigan in 1906.
Kellogg, known for brands like Froot Loops and Corn Flakes, is trying to adapt to US consumers shifting away from breakfast cereals. Late last month, Brian Driscoll, president and chief executive officer of Diamond Foods, said the San Francisco-based company was evaluating acquisition opportunities in on-trend categories. The cereal products of the Business are typically marketed underneath the Kellogg’s name and can be bought to the supermarket trade through direct sales forces for resale.
Kellogg is struggling in North America where, although investment behind its cereal brands is slowing negative sales trends, the result is weakening operating profit and lower return on investment. The firm had revenue of $3.50 billion for the quarter, compared to the consensus estimate of $3.46 billion.
Additionally, Kellogg Company now has a market capitalization of 24.61B.
Diamond had early this year put itself for sale and last week asked for final bids. The source added that Kellogg has been Diamond’s aggressive suitor.
Diamond’s biggest shareholders are hedge fund Oaktree Capital Management, with a 14 per cent stake, and BlackRock Institutional Trust Co, with a stake of almost 7 per cent. The shares opened for trading at $69.12 and hit $69.98 on the upside, eventually ending the session at $69.61, with a gain of 0.93% or 0.64 points.
In its most recent quarter Kellogg Company had actual sales of $ 3498M.
Another candidate to be acquired by Kellogg, according to Bloomberg View, might have been Amplify Snack Brands for $930 billion. Zacks lowered shares of Kellogg Company from a hold rating to a sell rating in a report on Tuesday, June 23rd.
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M. This represents a 0.724% difference between analyst expectations and the Kellogg Company achieved in its quarterly earnings.
