Kellogg is hoping to expand beyond breakfast foods with the $1.5 billion purchase of snack foods company Diamond Foods.
According to the New York Post, the company will pay $35-$40 a share, or a premium of up to 22% based on Diamond’s Thursday close.
Following news of the possible acquisition shares of the Kettle potato chips and Pop Secret popcorn maker increased by 6%.
Diamond Foods had hired Credit Suisse to help explore a sale.
Revenue at Diamond Foods missed analysts’ estimates for the last four quarters. It also exited its low-margin nut products business in early 2015.
Kellogg’s strategy for expansion has mostly involved purchasing other food businesses both nationally and internationally.
Diamond’s biggest shareholders include hedge fund Oaktree Capital Management, with a 14 percent stake, and BlackRock Institutional Trust Co, with a nearly 7 percent stake.