Diamond deal for P&G as big crisp brands crunch together

Crisps brands Pringles and Kettle are to come together after consumer goods giant Procter & Gamble agreed a bumper £1.5 billion (£924 million) deal with Diamond Foods.

P&G will split off the Pringles business and combine it with Diamond, with P&G shareholders owning 57 per cent of the new company and Diamond investors the rest, the companies said yesterday.

Diamond, known for its Kettle crisps and Pop Secret popcorn, will also take on some $850m of Pringles debt, giving a total deal value of $2.35bn. By adding Pringles to its portfolio, Diamond - founded in 1912 by a group of Californian walnut growers - will more than triple the size of its snack business, and expects net sales of about $1.8bn in the year to the end of July, 2012.

San Francisco-based Diamond, which has grown through acquisition, bought General Mills' Pop Secret business for $190m in September 2008 and some assets of Harmony Foods in May 2006. It acquired Kettle Foods for $615m in February of last year.

Michael Mendes, chairman and chief executive of Diamond, said: "Pringles is an iconic, billion-dollar snack brand with significant global manufacturing and supply chain infrastructure."

The firm said the addition of Pringles would more than double its snack sales in the US and the UK - the brand's two biggest markets.

Pringles products are now sold in 140 countries, with manufacturing plants in the US, Europe and Asia. It has continued to add flavours based on region, including seaweed in Asia.