TreeHouse Foods seeks another buyer for cereal business after terminating Post Holdings agreement
15 Jan 2020 --- Manufacturer and distributor of private label packaged foods and beverages in North America, TreeHouse Foods, has mutually agreed with Post Holdings to terminate the previously-announced agreement to sell its ready-to-eat (RTE) cereal business to Post. TreeHouse Foods will also begin the process of re-marketing the business for sale. This closely follows the December 19, 2019, complaint filed by the Federal Trade Commission (FTC) opposing the sale of TreeHouse's RTE cereal business to Post Holdings.
“After thoroughly evaluating our options and the potential outcomes, our Board has determined that terminating the agreement with Post and immediately seeking another buyer for the business is the proper course forward,” says Steve Oakland, CEO and President of TreeHouse Foods. “Unfortunately the business risk, necessary resources and extent of time required to challenge the FTC's position was not in the best interest of our constituencies.”
The FTC voted to file an administrative complaint and authorize staff to seek a temporary restraining order and preliminary injunction in federal court that would stop the proposed acquisition late last year.
The FTC charged that the acquisition would have given Post more than a 60 percent share of an already highly concentrated market, and eliminated the vigorous competition between Post and TreeHouse Foods to serve retailers across the country.
“The FTC unanimously voted to challenge this deal because it was likely to lead to higher prices and reduced quality for private label ready-to-eat cereals. Households across America have benefitted from robust competition between Post and TreeHouse, Fods and they will continue to do so now that this merger has been abandoned,” notes a statement from Ian Conner, Director of the FTC Bureau of Competition
TreeHouse Foods acquired the RTE cereal business from Conagra Brands as part of the Private Brands transaction in 2016. The business operates two manufacturing plants in Lancaster, Ohio and Sparks, Nevada, both in the US.
TreeHouse Foods has 40 production facilities across the US, Canada and Italy. Its product portfolio includes shelf-stable, refrigerated, frozen and fresh products, including baked goods (cookies, crackers, pretzels, refrigerated dough, frozen waffles, in-store bakery products and snack bars); beverages (broth, single-serve hot beverages, ready-to-drink coffee, creamers and powdered drinks); and meal solutions (dressings, hot cereal, macaroni and cheese, pasta, pickles, sauces and side dishes).
Post Holdings is a US consumer packaged goods holding company headquartered Missouri, US, and operating in the center-of-the-store, foodservice, food ingredient, refrigerated, active nutrition and private label categories.
Edited by Gaynor Selby
