SAN FRANCISCO -- Diamond Foods here has agreed to merge with the Pringles business currently owned by Procter & Gamble in a deal that would greatly increase the size of Diamond and continue P&G's shift away from the food industry.
The transaction, which Diamond said is valued at about $2.35 billion, would involve Cincinnati-based P&G splitting off Pringles as a separate entity, and giving shareholders an option to exchange P&G shares for shares of Diamond. The existing shareholders of Diamond would own about 43% of the combined company.
"Pringles is an iconic, billion-dollar snack brand with significant global manufacturing and supply chain infrastructure," Michael J. Mendes, president and chief executive officer, Diamond Foods, said in a prepared statement. "This strategic combination will create an independent, global leader in the snack industry with a focus on quality and innovative products."
Diamond Food's portfolio includes the Diamond of California and Emerald nut brands, the Pop Secret microwave popcorn brand and Kettle Brand potato chips. Diamond had acquired Kettle Brand last year.
The merger with Pringles would make Diamond the second-largest snack-food company behind PepsiCo, according to reports.