Post Holdings Inc, which makes Honey Bunches of Oats and Grape-Nuts cereals, said it would buy Bob Evans Farms Inc for about $1.5 billion, adding vegetable-based side dishes and breakfast sausages to its portfolio.
Bob Evans shares were up 5.6 percent in premarket trading, matching Post`s offer of $77 per share.
The deal comes months after Post agreed to buy British breakfast cereal brand Weetabix for 1.4 billion pounds ($1.8 billion).
Bob Evans sells frozen foods such as refrigerated potato, pasta and pork sausages under Bob Evans, Owens, Country Creek and Pineland Farms brands.
The company also has a foodservice business, representing about 35 percent of sales volume.Post Holdings, which said it would fund the deal through cash on hand and debt, expects cost savings of $25 million following the deal.
The company said the transaction is expected to close by the end of Post`s second quarter of fiscal 2018.
UBS Investment Bank, Barclays, Goldman Sachs and Bank of America Merrill Lynch are Post`s financial advisers.
J.P. Morgan Securities LLC acted as an exclusive financial adviser to Bob Evans.
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