Kellogg is to buy the Pringles business from Procter & Gamble Co for $2.7 billion (€2.06 billion) in cash, as it aims to build its position in the global snacks market comparable to its strength in the cereal business.

P&G agreed to sell Pringles to Diamond Foods last year, but the deal fell apart because of delays caused by a US probe into Diamond's accounting practices.

P&G said the deal with Kellogg would be completed by this summer. The deal would lead to an after-tax gain of $1.4 billion to $1.5 billion, or 47 cents to 50 cents per share for P&G, which it was the same as estimated when it first announced the deal with Diamond last year.

Pringles has about $1.5 billion in annual sales.

Kellogg will borrow $2 billion to complete the deal and expects to limit its share repurchase program for about two years. The deal will add 8 to 10 cents per share before the impact of the deal to Kellogg's 2012 earnings.About 1,700 employees will move to Kellogg.

Including those one-time costs, the deal will lower Kellogg's earnings per share in 2012 by 11 to 16 cents.

Reuters