Kraft unloads Post cereals in merger deal

CHICAGO, Nov. 16 (UPI) -- Kraft Foods has agreed to sell its Post cereals business to Ralcorp Holdings in a $2.6 billion merger deal, it was reported Friday.

Irene Rosenfeld, the Kraft chairman and chief executive officer, called the accord, expected to be completed in 2008, "a transaction where everyone wins -- Kraft, Ralcorp, our respective shareholders and employees," the Chicago Tribune said.

The agreement is said to call for Kraft to merge its Post operation into Ralcorp, with Kraft stockholders getting a 54 percent ownership stake in the combined company.

Kraft, based in Northfield, Ill., reportedly had sought for months to divest the relatively low-profit margin Post segment. Ralcorp, headquartered in St. Louis, makes "private-label" cereals that grocery chains sell as in-house brands.

Crain's Chicago Business said Rosenfeld had been urged over the past year to sell off brands that don't fit within the company's main cheese, meat, convenience meals and snack businesses.