|
General Mills buys Chex
|
 |
August 14, 1996: 11:13 a.m. ET
Ralcorp to sell popular brand to General Mills for $570 million
|
NEW YORK (CNNfn) -- General Mills Inc. on Wednesday agreed to buy Ralcorp Holdings Inc.'s cereal and snack lines, including the popular Chex brand, for about $570 million in stock and debt.
In a move to solidify its position as the nation's second largest breakfast-cereal maker, General Mills said it will acquire the rights to Chex, Cookie Crisp and Almond Delight ready-to-eat cereal brands in addition to Chex Mix snack food and all other cereal brands. Ralcorp will retain its private-label cereal brands and Beech-Nut baby food.
"The sale of our branded cereals and snacks further improves shareholder value," Ralcorp President Richard A. Pearce said in a statement. "We are merging our branded business with a company that is better able to realize a full range of marketing synergies and operating efficiencies for these products."
Terms of the agreement call for General Mills to assume between $210 million and $240 million in Ralcorp debt and issue stock worth between $330 million and $360 million.
The deal could boost General Mill's market share to about 27 percent of the $8 billion breakfast-cereal market, moving it six market-share points closer to industry leader Kellogg Co. and widening the gap with No. 3 Philip Morris Cos.
Ralcorp, a St. Louis-based subsidiary of Ralston Foods, said its cereals accounted for $344.2 million in annual sales. Its snack products recorded sales of $81.9 million for the year ending in June.
Wednesday's announcement followed the earlier sale of Ralcorp's ski resorts in Colorado, a development that came as the company is restructuring.
|
|
|
General Mills
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
