Kellogg to add roughly $2 billion debt for Pringles acquisition

By Aleesia Forni

Columbus, Ohio, Feb. 15 - Kellogg Co. will acquire Proctor & Gamble Co.'s Pringles business for $2.695 billion using a mix of international cash and roughly $2 billion of debt.

"We're trying to match as best we can, use of international cash with some short-term debt, and then we're looking at long-term debt as well, so there's a mixture of debt that we'll be placing out in the markets," chief financial officer Ronald L. Dissinger said during the company's conference call to announce the transaction on Wednesday.

The company expects to decrease its share repurchase program while it pays down debt.

However, the Battle Creek, Mich.-based food and cereal company is "likely to repurchase shares to the extent of [a] stock option exercise to offset the dilution effect," according to Dissinger.

Kellogg also expects to maintain a "strong" investment-grade rating and will be committed to reducing debt levels to "rebuild [its] financial flexibility."

The acquisition is targeted to close by June 30.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.