Kraft Foods Inc. (NYSE: KFT) announced a definitive agreement to merge its Post cereals business into Ralcorp Holdings (NYSE: RAH). The transaction is tax-efficient and worth approximately $2.6 billion to Kraft and its shareholders. For purposes of comparison, to have achieved an equivalent amount in a taxable transaction, Kraft would have needed to receive approximately $4.0 billion in cash for the business.
The Post cereals business had net revenues of about $1.1 billion in 2006, and includes such popular cereals as Honey Bunches of Oats, Pebbles, Shredded Wheat, Selects, Grape Nuts and Honeycomb. The brands in this transaction are distributed primarily in North America.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
11-15-2007 @ 9:29AM
Gene Gross said...
How does the shareholders of kraft foods ,profit from this? Does It pay to buy more shares of Kraft foods?
11-22-2007 @ 9:47PM
GLENN GERHARD said...
Does this sale to Ralcorp include the cereal drink Postum?