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06/02/2021

Post acquires TreeHouse cereal business

Post Holdings acquired the private label leader’s ready-to-eat cereal business for $85 million; the two companies attempted a deal two years ago but was halted by FTC.
Dan Ochwat
Executive Editor
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TreeHouse Foods and Post Holdings have a new cereal business deal. 

The Federal Trade Commission (FTC) had blocked the two companies previously over concerns of unfair competition, but the two companies signed a definitive agreement and completed a sale on June 1. Post Holdings is acquiring the TreeHouse ready-to-eat cereal business for $85 million. 

In 2019, the companies announced a deal for $110 million but the Federal Trade Commission (FTC) filed a lawsuit opposing the acquisition, claiming the two companies are only two of three significant manufacturers of private label ready-to-eat cereals in the U.S. The agency said the move would give Post a more than 60% share and eliminate competition between the companies. The two food manufacturers ended the deal shortly after the FTC interference.

TreeHouse announced that the acquisition includes the entirety of the RTE business based in St. Louis, where Post Holdings is headquartered. The acquisition also includes two facilities located in Lancaster, Ohio, and Sparks, Nev., which feature a wide range of production capabilities across batch and extruded products, a research and development facility located in Sauget, Ill., as well as inventory valued at approximately $30 million. 

The financial results of the acquired RTE cereal business are expected to be reported in the Post Consumer Brands segment and are expected to be modestly dilutive to Post’s Adjusted EBITDA for fiscal year 2021 and accretive in fiscal year 2022.

"This transaction is another important step in our strategic journey to create value for our customers and our shareholders," said Steve Oakland, CEO and president of TreeHouse Foods. "Based on our thorough efforts to find alternative buyers for the business, we believe this transaction is not only in the best interest of its employees and customers, but also gives the business the opportunity to flourish as part of Post. I want to express my gratitude to the approximately 500 RTE team members for their ongoing commitment, as we work closely with Post to facilitate a smooth transition for all stakeholders."