Kraft planning to sell its Post Cereals unit, says report

17 August 2007

Mumbai: Kraft Foods Inc. of the US is looking for a buyer for its cereals business Post Cereals, which makes the Grape Nuts and Shredded Wheat brands, The Wall Street Journal reported on its website.

Kraft, the largest US food company by sales and the third in terms of cereal sales after Kellogg Co. and General Mills Inc., could get as much as $3 billion for the Post Cereals business, the report quoted sources close to the developments as saying.

PepsiCo Inc., which owns Cap'n'Crunch and Life cereal brands through its Quaker unit, is one of several logical bidders, the report said.

Kraft has disclosed financial information on Post Cereals to potential bidders and a deal could be signed later this year, the report said.

Kraft's chief executive Irene Rosenfeld, former chief executive of PepsiCo's Frito-Lay division, had said earlier this month that the company was evaluating its portfolio to divest businesses that don't fit with Kraft's strategic plan of organic growth. Those businesses, she had then said, constituted less than 5 per cent of Kraft's sales.