The cereal maker, Post Holdings Inc., is buying its fellow packaged food maker, Michael Foods Inc., for $2.45 billion. The new, largest-ever deal for the company will expand Post's range of products, according to Reuters.
The new deal is expected to close in the second quarter, according to The Wall Street Journal. Michael Foods itself will actually continue to operate independently under its current management team. The deal comes after a bid from Tyson Foods Inc. and others, though Michael Foods eventually emerged victorious.
Post Holdings Inc. is responsible for products such as Raisin Bran and Honey Bunches of Oats. This latest deal, though, will give it an edge when it comes to protein, according to Reuters. Michael Foods is known for branches such as Papetti's, All Whites, Better 'n Eggs and Simply Potatoes.
In the past year, Post has added protein bars, peanut butter and pasta products to its array of offerings, according to The Wall Street Journal. And while other companies have been streamlining operations by selling brands, Post has expanded. This is partially due to a change in consumer eating habits. Post's cereal business has been struggling as people choose more portal and less carbohydrate-heavy breakfasts.
Post has stated that it expects the deal to add to earnings per share, excluding transavtion costs, according to Reuters. In addition, it will pay $50 million on the first anniversary of the deal's closing, which is expected in the second quarter.
