PROCTER & Gamble has agreed to sell potato crisps brand Pringles to Diamond Foods, in a deal worth $1.5bn (£921.6m) in shares.
Offloading the 45-year-old brand, known for its crisps sold in more than 140 countries, will mark the conglomerates departure from the food sector.
US-based Diamond Foods, which owns a variety of snack brands including Kettle chips, will triple the size of its existing business with the purchase.
Diamond will pay using 29.1m shares of common stock and will take on Pringles’ $850m of debt.
The deal is expected to be tied-up by the end of this year, which will require Diamond to pay about $100m to complete the merger.
The California-based snack company, which also owns Emerald nuts and Pop Secret microwave popcorn, is projecting net sales of about $1.8bn by 2012.
The firm expects to see its sales more than double in the US and UK by adding Pringles to its stable.
The deal will also give Diamond a foothold in the fragmented snack market, currently dominated by PepsiCo’s Frito-Lay snack business.
Janney Capital Markets analyst John San Marco said: “It is still a fraction of Frito-Lay’s snack business, literally about one-tenth of the size.
“Aside from Frito-Lay, there are no other real true global powerhouses. Pringles is certainly in better strategic hands as part of a dedicated snack business.”