Snyder's-Lance to acquire Diamond Foods in $1.91bn deal
Under the deal, which is expected to close in early 2016, Diamond stockholders will receive 0.775 Snyder’s-Lance shares and $12.50 in cash per Diamond Foods share.
Bringing together the two businesses will create an “innovative, highly complementary and diversified portfolio of branded products”, said Charlotte, NC-based Snyder’s Lance, which said combined revenues would be approximately $2.6bn, while annual cost savings – from synergies - would be $75m.
The deal would boost Snyder’s-Lance’s presence in ‘better-for-you’ snacking, increase its penetration in the natural food channel, strengthen its direct store delivery network in the US, and provide the firm with a platform for growth in the UK and across Europe, said president and CEO Carl E. Lee, Jr.
“We plan to take full advantage of the combined sales forces of Snyder's-Lance and Diamond to drive stronger top line growth than either company could achieve alone. Additionally, we will have an opportunity to grow internationally with Diamond’s existing European platform, bringing unique products to consumers in that market.”
Diamond president and CEO Brian J. Driscoll – who will join the board of directors of Snyder’s- Lance - added: “This transaction will create a diversified, branded snacking portfolio with greater operating scale. In addition, we expect the transaction will provide us with greater resources to further develop new product innovation and broaden our geographic reach and route to market across complementary customer bases.”
The combined portfolio will include Kettle Brand potato chips, KETTLE Chips, Pop Secret popcorn, Emerald snack nuts, Diamond of California culinary nuts, Snyder’s of Hanover, Lance, Cape Cod, Snack Factory, Pretzel Crisps, and Late July.
Euromonitor International: Deal will propel Snyder's Lance into #2 position in savory snacks in the US
Pinar Hosafci, foods analyst at market research company Euromonitor International, said Diamond Foods would be "a valuable addition to Snyder’s-Lance’s portfolio which, with a 3.7% market share, ranks in fourth place in the US savory snack market - the world’s largest snacks market. The merger will see its share increase to 5.6% and will put it into second place ahead of Kraft-Heinz and ConAgra Foods [but still well behind PepsiCo] in the US."
Hosafci added: "The expansion of Synder’s-Lance’s portfolio into healthier snacks and popcorn will also enable the company to better compete against PepsiCo while at the same time giving the company the opportunity to grow internationally thanks to Diamond’s existing European presence."
