Post Holdings to buy TreeHouse cereal business, fold into Lakeville-based unit

Post Holdings is acquiring TreeHouse Foods' cold cereal business, expanding its private-label business.

Terms of the deal weren't disclosed.

The business will be folded into Lakeville-based Post Consumer Brands, the cereal division of St. Louis-based Post Holdings, which already includes MOM Brands, known for Malt-O-Meal and its large bagged cereals.

TreeHouse, based in Chicago, makes cereals, snacks and meals for other companies, usually supermarkets, under their own store brands.

The company's ready-to-eat cereals accounted for $264 million in sales last year. By comparison, Post Consumer Brands reported North American cereal sales of $1.8 billion in 2018.

"We believe that the [ready to eat] business has a wonderful opportunity to flourish under Post's ownership," Steve Oakland, chief executive of TreeHouse Foods, said in a statement.

"Selling the ready-to-eat cereal business allows us to bring greater focus to the TreeHouse organization and represents another step on our portfolio optimization journey," he added.

Post is the nation's third-largest cereal maker, behind Golden Valley-based General Mills and Battle Creek, Mich.-based Kellogg Co.

A spokeswoman for Post Consumer Brands did not respond to a request for comment.

In a statement, Post said the TreeHouse cereals will contribute annual pretax earnings of $15 million to $20 million.

The sale is expected to close this summer.

TreeHouse plans to shutter its Minneapolis nuts and trail-mix plant, putting 120 workers out of a job.

The Chicago-based company reported languid sales of snacks in its first-quarter results Thursday.

TreeHouse said it scheduled the closure of the Minneapolis plant for around September "to provide employees with as much notice as possible and to ensure a seamless transition for customers."