Kellogg To Buy Brazilian Food Group Parati For $429 Mln In Cash
The purchase price is R$1.38 billion, or about $429 million at current exchange rates, and it will be an all-cash transaction.
With the acquisition, the company's largest in Latin America, Kellogg aims to become a snacking powerhouse and expand its presence in emerging markets.
The acquisition, through its subsidiary Pringles Serviços e Comércio de Alimentos Ltda, is subject to customary closing conditions and is expected to close in late 2016.
To preserve financial flexibility, Kellogg intends to reduce its expected share repurchases in 2016 to $450 million -$550 million, versus previous guidance of $700 million-$750 million.
In 2016 and 2017, the deal is expected to be neutral to Comparable-basis earnings per share, depending on exchange rates, with only a slight impact on Reported earnings per share because of one-time costs per-share in both years. The acquisition is expected to be accretive on both Comparable and Reported EPS in 2018 and thereafter.
Parati Group has 3,200 employees. The company also has five distribution centers and two production facilities with room for expansion. (dpa)
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