Procter & Gamble is selling its homegrown Pringles snacks business, a long-rumored deal that will get the company out of the food business.
San Francisco-based Diamond Foods Inc. plans to buy the business in a deal valued at $2.35 billion.
About 1,600 people work for the Pringles business worldwide, with about 150 in Cincinnati, said P&G spokesman Paul Fox.
"This allows us to divest our snacks business and better enables P&G to focus on our core categories,” including household products, beauty care and consumer health brands, Fox said.
The potato snacks are made in Tennessee, Belgium, China and Malaysia and would have had $1.4 billion in sales this year, P&G said.
For shareholders, the deal is known as a “reverse Morris trust,” and is the same way P&G divested its Folgers coffee business in 2008. P&G shareholders will have the option of exchanging P&G shares, at a to-be determined ratio, for shares in a new Pringles entity.
That entity will then be merged into Diamond Foods. Shareholders will ultimately own shares in Diamond if they elect to exchange their P&G shares.
Diamond’s products include Emerald nuts, Kettle Brand potato chips and Pop Secret microwave popcorn. The deal will more than triple the size of its snack business.
The deal will give Procter & Gamble a one-time earnings boost of about $1.5 billion, or 50 cents per share, the company said.
In recent years, P&G has slowly exited the food business, selling Folgers, Jif peanut butter, Crisco shortening and Sunny Delight drinks.
http://news.cincinnati.com/article/20110405/BIZ/304050039/0/NEWS0102/P-G-selling-Pringles?odyssey=nav|head
Pringles: Who knew? Local lore
There's plenty of local lore associated with the world's first stackable potato crisps packaged in a tube-shaped can:
• The chips almost were called "Winkles." That's the name an ad agency came up with. But P&G brand manager Gerald Gendell wanted alliteration. His daily commute to work took him past Finneytown's Pringle Drive, which inspired the name. Pringles potato crisps it would be.
• Fredric J. Baur was so proud of having designed the Pringles container that he asked his family to bury him in one. His children honored his request. Part of his remains was buried in a Pringles can - along with a regular urn containing the rest - in his grave at Arlington Memorial Gardens in Springfield Township. The College Hill resident, who specialized in research and development and quality control for P&G, died in May 2008 at age 89.
• Before he moved on to General Electric where he became CEO, Jeffrey Immelt worked in brand management on Pringles. A Finneytown native (but not a resident of Pringle Drive), Immelt worked on the salty snack after graduating from Dartmouth in 1978.
• Pringles were invented by Alexander Liepa of Montgomery. Gene Wolfe developed the machine that cooks them. Their consistent saddle shape is mathematically known as a hyperbolic paraboloid.
http://news.cincinnati.com/article/20110405/BIZ01/104060326/Pringles-Who-knew-Local-lore?odyssey=tab|topnews|text|Business
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