SAN FRANCISCO (AP) - Diamond Foods Inc. is buying Procter & Gamble Co.'s Pringles chips business in a deal valued at $1.5 billion.
Analysts have been speculating for years that Procter & Gamble might shed Pringles, as the world's biggest consumer products maker had indicated in the past that the food business didn't fit in with the rest of its portfolio.
Diamond, whose products include Emerald nuts, Pop Secret microwave popcorn and Kettle Brand potato chips, said Tuesday that the transaction will more than triple the size of its snack business and help bring its total annual revenue to about $2.4 billion.
The San Francisco company's stock gained $4.99, or 8.7 percent, to $62.21 in premarket trading.
"Pringles is an iconic, billion dollar snack brand with significant global manufacturing and supply chain infrastructure," Diamond Chairman, President and CEO Michael J. Mendes said in a statement.
Diamond, which concentrates on snack foods, says the addition of Pringles will more than double its snack sales in the U.S. and U.K., which are Pringles' two biggest markets. It will also give Diamond a greater presence in U.S. grocery, drug, mass merchandise and convenience stores.
The Pringles brand is more than four decades old, and is sold in more than 140 countries, with manufacturing plants in the U.S., Europe and Asia.