Post Holdings to buy MOM Brands for $1.15bn

US cereal maker Post Holdings has agreed to buy privately held MOM Brands for around $1.15bn, boosting its branded RTE cereal, private label, and hot wheat and oatmeal portfolio.

This acquisition of high-quality RTE and hot cereal products provider will solidify Post’s position as the third largest provider of RTE cereal with a combined dollar share of approximately 18%.

Post president and CEO Rob Vitale said: "For Post, this is the right move, at the right price, in the right category.

"After a century of spirited rivalry between MOM Brands and Post, we now look forward to combining our strengths."

Post will pay $1.05bn in cash and issue around 2.45m shares of Post common stock to the current owners of MOM Brands.

The transaction is expected to be complete by the third calendar quarter of 2015.

MOM Brands offers products including Malt-O-Meal, Frosted Mini Spooners, Golden Puffs, Better Oats, and Three Sisters. The company had net sales of $760m in the year ended on 27 December, Reuters reported.

MOM Brands Chairman and CEO Chris Neugent said: "By joining forces with Post, we will have more resources available to innovate, extend our brands and expand distribution.

"We believe that this new, combined enterprise will be uniquely positioned to help our customers find new solutions in the highly competitive cereal category. In addition, it will give us the opportunity to pursue our mission of saving families money on an even greater scale."

Earlier in 2014, Swiss food giant Nestlé had signed a deal with Post Holdings to divest its premium sports nutrition business under the PowerBar and Musashi brands.

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Image: MOM Brands offers products including Malt-O-Meal, Frosted Mini Spooners, Golden Puffs, Better Oats, and Three Sisters. Photo: courtesy of voraorn/ freedigitalphotos.net.