Packaged foods maker Diamond Foods, Inc. (
) and consumer products maker The Procter & Gamble Company (
) on Tuesday announced an agreement to sell the Pringles potato
chip business to Diamond for $1.5 billion in stock.
In pursuant to the deal, Diamond will also assume Pringles' $850
million debt, making the total value of the deal worth $2.35
P&G will own 29.1 million shares of DMND stock after the
transaction has completed. Pringles will be spun off from P&G
and merged into DMND, with P&G retaining ownership of about 57%
of the newly-combined company, and DMND owning around 43%.
Diamon Foods CEO Michael Mendes comments, "Pringles is an
iconic, billion dollar snack brand with significant global
manufacturing and supply chain infrastructure. Our plan is to build
upon the brand equity Pringles has established in over 140
countries. This strategic combination will create an independent,
global leader in the snack industry with a focus on quality and
innovative products. Not only is this combination immediately
accretive, it also creates a platform that we believe will allow us
to build shareholder value for years to come."
Diamond Foods shares soared $4.38, or +7.7%, in premarket
trading Tuesday, while Procter & Gamble shares were mostly
The Bottom Line
We have been recommending shares of Procter & Gamble (
) since Sept.1, 2009, when the stock was trading at $54.11. The
company has a 3.10% dividend yield, based on last night's closing
stock price of $62.26.
Diamond Foods, Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars. The Procter & Gamble Company (
) is a "Recommended" dividend stock, holding a Dividend.com DARS™
Rating of 3.5 out of 5 stars.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here