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What: Shares of snack maker Diamond Foods
So what: Diamond agreed to take over the Pringles brand from P&G for $2.35 billion, which will consist of $1.5 billion in Diamond shares and the assumption of $850 million in Pringles debt. The deal will split off the Pringles business via an exchange offer that will allow P&G shareholders to swap P&G shares for shares of Diamond. It will also include an adjustment mechanism that will, based on Diamond's stock price prior to the stock exchange, increase or decrease the amount of debt Diamond will assume.
Now what: Strategically, the deal makes sense for both sides. P&G was interested in shedding its lone snack-food brand, while Diamond has been eager to bulk up its brand portfolio to better compete with larger snack forces like Pepsi
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