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Snyder’s-Lance Will Spend $1.27 Billion for Diamond Foods

popSnyder’s-Lance Inc had agreed to acquire Diamond Foods Inc the maker of snacks, which settled a probe over accounting last year with regulators, for $1.27 billion to add Emerald almonds and Kettle potato chips to its lineup.

Investors in Diamond will be given 0.775 of a share of Snyder’s-Lance as well as $12.50 in cash for every share owned, the two companies announced in a statement on Wednesday.

The deal includes assumption of debt in the amount of $640 million bringing the transaction in total to over $1.91 billion. The offer of equity of approximately $40.46 per share represents a premium of 16% to the closing price of Diamond as of Tuesday.

This takeover will give Snyder’s-Lance a stable of brands that is more formidable adding the line of Diamond nuts, Pop Secret Popcorn and chips businesses to the lineup of its Snyder’s of Hanover pretzels, Cape Cod chips and Lance crackers.

Snyder’s-Lance said that this acquisition would strengthen its network of store delivery across the U.S. and help it expanded into the United Kingdom and across all of Europe.

Annual cost-savings were forecasted by the company of $75 million and the purchase should boost per share earnings starting in 2016.

This deal illustrates how Diamond, based in San Francisco, evolved from a company that was fast growing built through acquisitions to a target for a takeover.

Diamond’s bid to purchase Pringles from Proctor & Gamble, the former owner of the chip company, in 2012 became derailed following an accounting probed that forced it to make a restatement of its earnings that led to Michael Mendes the then-CEO being ousted.

Kellogg Co, the cereal maker then bought Pringles.

Diamond reached an agreement with regulators to pay a fine last year of $5 million to settle the claims of regulators that its former executives had under reported the costs of walnuts to increase profit.

Diamond Foods’ shares were up 6.4% on Wednesday. They have gained more than 24% in 2015, including an increase of 6.6% last Friday after a New York daily said Kellogg was negotiating to buy the company.

Shares of Snyder’s-Lance plummeted by up to 11%, the biggest drop intraday since February of 2011.

The deal has been approved by both board of directors, and the largest shareholder of Diamond, Oaktree Capital, will vote for the deal.

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