Kellogg in talks to buy Diamond Foods for S$2.08 billion: NY Post

Corn Flakes maker Kellogg Co is in late-stage talks to buy snack foods company Diamond Foods Inc for more than US$1.5 billion (S$2.08 billion).
Corn Flakes maker Kellogg Co is in late-stage talks to buy snack foods company Diamond Foods Inc for more than US$1.5 billion (S$2.08 billion).PHOTO: BLOOMBERG

NEW YORK (REUTERS) - Corn Flakes maker Kellogg Co is in late-stage talks to buy snack foods company Diamond Foods Inc for more than US$1.5 billion (S$2.08 billion), the New York Post reported, citing sources.

Kellogg could pay US$35-Us$40 a share, the report said, implying a premium of up to 22 per cent to Diamond's Thursday close. Shares of the maker of Kettle potato chips and Pop Secret popcorn rose 6 per cent to US$34.80 in early trading on Friday.

Diamond Foods had hired Credit Suisse to help explore a sale, DealReporter said in September.

The company has struggled to boost sales this year. Revenue missed analysts' estimates in the last four quarters and the company exited a low-margin nut products business this year.

Kellogg has been trying to expand its snack foods business through acquisitions and increase its international presence as sales of cereals decline in the United States.

It bought Egyptian baker Bisco Misr in January and entered into a distribution deal to expand in Africa.

Diamond Foods declined to comment. Kellogg was not immediately available for comment.

Diamond's biggest shareholders are hedge fund Oaktree Capital Management, with a 14 per cent stake, and BlackRock Institutional Trust Co, with a nearly 7 per cent stake.

Kellogg shares were little changed in early trading.