Packaged foods maker Kellogg Company ( K ) on Wednesday announced it would buy canned potato crisp maker Pringles from The Procter & Gamble Company ( PG ).
The $2.7 billion cash deal will bolster Kellogg's positioning in the global snack foods market. The company seeks to build its presence in that arena to a similar to its strength in the cereal business.
Previously, P&G had agreed to Pringles to embattled snacks maker Diamond Foods ( DMND ) in 2011. However, that deal was nixed due to federal probes into Diamond's suspect accounting practices.
Kellogg shares rose $1.18, or +3.2%, in premarket trading Wednesday, while Procter & Gamble shares were mostly flat.
The Bottom Line
Shares of Kellogg ( K ) have a 3.42% dividend yield, based on last night's closing stock price of $50.82. The stock has technical support in the $46-$48 price area. If the shares can firm up, we see overhead resistance around the $51-$52 price levels. Shares of Procter & Gamble ( PG ) have a 3.26% dividend yield, based on last night's closing stock price of $64.48. The stock has technical support in the $62-$64 price area. If the shares can firm up, we see overhead resistance around the $68-$70 price level.
Kellogg Company ( K ) and The Procter & Gamble Company ( PG ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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