GRAND RAPIDS, Mich. - Cereal giant Kellogg Co. said Thursday that it will buy Keebler Foods Co. for almost $3.9 billion, putting Tony the Tiger on the same corporate shelf as the Keebler elves.
The merger will create a company with almost $10 billion in annual sales and extend Kellogg's operations beyond the breakfast table and into faster-growing areas of the food business.
Job losses or cutbacks have not been determined, though no cuts were expected in Battle Creek which will remain the company's base, Kellogg spokesman Richard Lovell said.
Kellogg, the world's leading cereal maker and a leader in convenience foods, has annual sales of nearly $7 billion. Its brands include Frosted Flakes, Special K and Rice Krispies cereals, Eggo waffles, Pop-Tarts and Nutri-Grain bars.
Keebler and its subsidiaries are the second-largest cookie and cracker maker in the United States, with annual sales of $2.7 billion. Among its brands are Famous Amos cookies and Cheez-It crackers.
''It's a long-term positive for Kellogg because they needed a broader business portfolio,'' said John McMillin, who follows the food industry for Prudential Securities.
Besides the $3.9 billion cash deal, Kellogg will assume Elmhurst, Ill.-based Keebler's debt of about $500 million. The deal is subject to stockholder and regulatory approval.
On the New York Stock Exchange, Kellogg shares were up $1.56 Thursday to $24.31 and shares of Keebler were up $1.06 to $40.44.
On the Net:
http://www.kelloggs.com
http://www.keebler.com
