Piece by piece, cereal maker Post Holdings Co. has increased its portfolio to take on breakfast food behemoths Kellogg and General Mills. The mission to expand its bagged and hot cereal categories continued Monday with Post’s purchase of small, privately held rival MOM Brands Co. for $1.15 billion.
Reuters reports that Post will purchase the smaller company for $1.05 billion in cash and $100 million (equal to 2.5 million) in shares of Post. The deal is expected to close in the third quarter of 2015.
MOM Brands produces a number of value segment bagged cereals including Malt-O-Meal, Golden Puffs and Cinnamon Toasters.
“For Post, this is the right move, at the right price, in the right category,” Rob Vitale, Post’s President and CEO, says in a statement. “After a century of spirited rivalry between MOM Brands and Post, we now look forward to combining our strengths.”
Officials with Post say the purchase of MOM Brands gives the company a boost in its market shares and solidifies its place as the third largest provider of ready-to-eat cereal. Still, the company’s 18% share falls well below that of Kellogg Co, which has a 32% market share, and General Mills, which has a 31% share.
UPDATE 2-Post Holdings to buy MOM Brands to expand in hot cereals market [Reuters]
by Ashlee Kieler via Consumerist