Procter & Gamble Co
P&G will split off the Pringles business and combine it with Diamond Foods, with P&G shareholders owning 57 percent of the new company and Diamond stockholders the rest, the companies said.
Diamond, known for its Pop Secret popcorns and Kettle chips,
will also assume $850 million of Pringles debt.
By adding Pringles to its portfolio, Diamond will more than triple the size of its snack business, and expects net sales of about $1.8 billion in the fiscal year ending July 31, 2012, the companies said in a statement.
Diamond, which has grown through acquisitions, bought General Mills'
Diamond expects one-time costs of about $100 million related to the transaction over the next two years. P&G said the deal will add about 50 cents a share to its earnings.
Diamond Food shares were up 8 percent at $61.60, while Procter & Gamble shares were down slightly at $62.15 Tuesday before the markets opened.
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Jarshad Kakkrakandy and Saumyadeb Chakrabarty)