Post acquires TreeHouse RTE cereal business

By Gill Hyslop

- Last updated on GMT

Post Holdings is acquiring TreeHouse Foods' private lable RTE cereals business. Pic: ©GettyImages/Anistock
Post Holdings is acquiring TreeHouse Foods' private lable RTE cereals business. Pic: ©GettyImages/Anistock

Related tags Post holdings TreeHouse Foods RTE cereals Breakfast cereal category

Consumer packaged goods company Post Holdings is acquiring the ready-to-eat cereal business of TreeHouse Foods for an undisclosed amount.

The business is a leading private label RTE cereal manufacturer serving a diverse set of customers across retail channels.

Post said the business will join its existing North American RTE cereal business, Post Consumer Brands.

The transaction is expected to close in the third quarter of 2019, subject to customary closing conditions, including the expiration of waiting periods under US antitrust laws.

Terms of the agreement were not disclosed, however, Post said it expects to incur $25-$30m in one-time costs.

Post also anticipates the St. Louis-based cereal business will generate around $15-$20m in revenue in the 12 months following the completion of the transaction.

Long runway for growth

 “The ready-to-eat cereal category represents nearly $9 billion in revenue at retail, and therefore, the business has a long runway for growth,” said Steve Oakland, CEO and president of TreeHouse Foods.

“We believe that the RTE business has a wonderful opportunity to flourish under Post’s ownership.

“Selling the ready-to-eat cereal business allows us to bring greater focus to the TreeHouse organization and represents another step on our portfolio optimization journey.”

TreeHouse acquired the RTE cereal business from ConAgra Brands as part of the Private Brands transaction in 2016.

It currently has three manufacturing plants in the US, although the company will complete the closure of one later this year.

It produced about $260m in sales in 2018.

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