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Feds Say Post-TreeHouse Tie-Up “Will Harm Competition”

January 2, 2020

2 Min Read
Feds Say Post-TreeHouse Tie-Up “Will Harm Competition”
The FTC is working to prevent Post Holdings from acquiring the ready-to-eat cereal business of TreeHouse Foods. Image courtesy of Pixabay

Post Holdings Inc.’s proposed purchase of TreeHouse Foods’ private label ready-to-eat cereal business may hurt the American ready-to-eat cereal market and give Post an unfair advantage in the category, the Federal Trade Commission (FTC) said in an administrative complaint filed on December 19. 

“Households nationwide benefit from the robust competition between Post and TreeHouse, and a merger between these companies would likely lead to higher prices and reduced quality of the store-brand cereals that consumers enjoy today,” Ian Conner, deputy director of the FTC’s Bureau of Competition, said in an agency release announcing the complaint. 

If the merger were to move forward, Post would own more than 60% of the private label ready-to-eat cereal market, according to the FTC, removing “competitive pressure” to produce higher quality and lower priced products. 

An administrative trial scheduled for May 27. The agency is also seeking a temporary restraining order and a preliminary injunction in federal court to hinder the merger from moving forward.   

“The FTC’s decision to block the combination of our ready-to-eat cereal business with Post is unfortunate,” TreeHouse Chief Executive Officer and President Steve Oakland said in a statement released by Post. “We are highly disappointed because we believe the transaction would enable Post to offer retail customers a full suite of ready-to-eat cereal offerings. We are in the process of reviewing our next steps, but in the meantime, we remain committed to delivering high quality products and great customer service to our customers.”

Post and TreeHouse said that the companies may not be able to close the transaction following the FDA’s move. 

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Post Holdings to Shutter Massachusetts Cereal Plant

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