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After an accounting audit into Diamond Foods signaled problems that squelched Diamond’s hopes of buying the Pringles chip brand from Procter & Gamble, Kellogg Co. has decided to buy the brand for $2.7 billion.
The move will strengthen Kellogg’s goal of becoming as global in the snacks sector as it is in cereal. The Pringles business will also enhance Kellogg's stable of snack brands that include Keebler, Cheez-It and Special K Cracker Chips.
Procter & Gamble and Diamond Foods, which makes Kettle Chips, Emerald Nuts and Pop Secret popcorn, said recently that they have mutually agreed to end their proposed Pringles deal for a proposed $1.5 billion.
"Pringles has an extensive global footprint that catapults Kellogg to the number-two position in the worldwide savory snacks category, helping us achieve our objective of becoming a truly global cereal and snacks company," says Kellogg president and CEO John Bryant in a statement.
Speculation grew over the past weeks that Diamond's proposed purchase was failing, especially after the San Francisco-based company said that it was replacing its CEO and CFO following an internal investigation, which found that Diamond had improperly accounted for payments to walnut growers. Kellogg says it expects to complete the Pringles acquisition during the summer, possibly on June 30.