St. Louis-based cereal maker Post, which bought the Minnesota-based maker of Malt-O-Meal earlier this year, says it will consolidate its cereal operations in Lakeville.

By Evan Ramstad

May 16, 2015 at 2:50AM

A box of Post brand Honey Bunches of Oats cereal sits on a shelf at Garden of Eden Grocery Store in New York. (Evan Ramstad — BLOOMBERG NEWS/The Minnesota Star Tribune)

The maker of Post cereals, which bought the Minnesota-based maker of Malt-O-Meal earlier this year, is combining the corporate offices of the two operations in the Twin Cities suburb of Lakeville.

As a result of the decision, St. Louis-based Post Holdings will close its cereal headquarters in Parsippany, N.J., where about 200 people worked. Some of them will be offered the chance to move to Minnesota.

The announcement Friday ends a period of uncertainty for local workers at MOM Brands, the longtime Minnesota company that Post bought in January for $1.15 billion.

The chief of MOM Brands, Chris Neugent, was tapped to lead Post Consumer Brands, the new Post unit formed by the deal. Post's main headquarters will remain in St. Louis.

A spokesman didn't return a call for comment. Post Holdings' stock traded lower for most of the day and closed down 1.9 percent.

Post is known for Honey Bunches of Oats, Raisin Bran, Grape-Nuts and Honeycomb.

In addition to Malt-O-Meal, MOM Brands makes low-priced versions of established brands. The company's bestselling cereal, Frosted Mini Spooners, resembles Kellogg's Frosted Mini-Wheats. It also makes private-label cereals, oatmeal under the Better Oats label and other cereals branded Mom's Best.

Post said it will save about $50 million in annual expenses by combining the operations in Minnesota. It said it expects a one-time charge of up to $30 million to cover severance, relocation and other expenses in downsizing the New Jersey office.

"Combining our businesses in Lakeville will create a powerful branded platform for both branded cereal and further acquisitions," Rob Vitale, Post Holdings' president and chief executive, said in a statement. "While I am delighted that Chris and his colleagues are joining Post, we are acutely aware of the contributions made by employees negatively impacted by this decision, and we are committed to helping them through this transition."

Post and MOM combined have an 18 percent share of the U.S. cereal market. General Mills Inc. and Kellogg Co. each have about a 30 percent market share. MOM Brands employs 250 at its corporate office in Lakeville and about 650 at its cold cereal plant in Northfield.

Post has been on a buying spree. In addition to MOM Brands, the company in the past year bought Minnetonka-based Michael Foods, a maker of cheese, eggs and refrigerated potatoes, as well as Dakota Growers Pasta Co., peanut butter maker Golden Boy Foods Ltd., sports nutrition brand PowerBar and two other small makers of diet supplements.

Lakeville Mayor Matt Little issued a statement saying he was excited by the news. "The jobs that will be retained are the high-skill, high-wage jobs that the economic development commission and City Council have targeted as a high priority," he said.

Evan Ramstad • 612-673-4241