TreeHouse Foods and Post Holdings are calling off their deal to transfer TreeHouse’s private-label breakfast cereal business after federal regulators objected.
The sale, announced last May, would have moved the private label cereal business that TreeHouse acquired from Conagra Brands in 2016 to Post. The deal, valued at $110 million, would have left Post with a 60% share of the private-label breakfast cereal market – which formed the basis for an objection filed by the Federal Trade Commission last month.
TreeHouse characterized the cancellation as a mutual agreement with Post. "Unfortunately the business risk, necessary resources and extent of time required to challenge the FTC's position was not in the best interest of our constituencies,” Steve Oakland, CEO and president of TreeHouse, said in a statement.
The cancellation is a hitch in TreeHouse’s current strategy of divesting assets it bought from Conagra in a 2016 deal. As part of that strategy, TreeHouse Foods is selling two bakeries, in Fridley, Minn., and Lodi, Calif., that make bread, rolls and cakes for in-store supermarket bakeries and foodservice venues. The sale, for an undisclosed sum to Rich Products, is scheduled to close by April 20.