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Issue Date: Vol. 51, No. 12, December 2011, Posted On: 11/4/2011

Diamond Foods Delays Closing Of Pringles Deal

Emily Jed
Diamond Foods, Pringles acquisition, Procter & Gamble, PG, acquisition delay, accounting investigation, closing conditions, antitrust approval, Kettle potato chips, Emerald Nut,  Pampers, Tide laundry detergent, Crisco shortening, Folgers coffee, Sunny Delight, Jif peanut butter, sold brand lines

STOCKTON, CA -- Diamond Foods said its acquisition of Pringles chips from Procter & Gamble will be delayed until the first half of 2012. The $1.5 billion acquisition, announced in April, had been expected to close in December. But the date has been pushed back to allow Diamond time to complete an accounting investigation.

Stockton, CA-based Diamond said the chairman of the audit committee of its board of directors received an external communication regarding the company's accounting to certain crop payments to walnut growers. The communication prompted Diamond Foods' audit committee to perform an internal investigation.

Diamond said the Pringles deal is still subject to customary closing conditions, but antitrust approval has already been obtained.

The company owns Kettle potato chips and Emerald Nut brands. The sale of Pringles by P&G, which makes Pampers and Tide laundry detergent, would continue its divestiture of food products. It sold its Crisco shortening, Folgers coffee, Sunny Delight and Jif peanut butter over the past few years.

Meanwhile, Procter & Gamble, raised its full-year profit outlook to reflect gains from the $1.5 billion sale of its Pringles snacks business. P&G also said it had started implementing its previously announced restructuring plans.

The company expects to report net earnings of $4.52 to $4.83 a share in 2012, up from its previous outlook of $4.17 to $4.33 a share. P&G's revised outlook includes restructuring costs.

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