Snyder’s-Lance Inc. (NASDAQ: LNCE) agreed to buy Diamond Foods Inc. (NASDAQ: DMND), the snackmaker that settled an accounting probe with regulators last year, for about $1.27 billion to add Kettle potato chips and Emerald almonds to its offerings.

Diamond’s investors will receive 0.775 of a Snyder’s-Lance share and $12.50 in cash for each of their shares, the companies said Wednesday in a statement. The deal also includes the assumption of $640 million in debt, bringing the total transaction value to about $1.91 billion. The equity offer of about $40.46 a share represents a 16 percent premium to Diamond’s closing price on Tuesday.

The acquisition follows other food deals including Kellogg Co. (NYSE: K) buying Mass Food Group  and Post Holdings Inc. (NYSE: POST) adding Willamette Egg Farms LLC. 

The takeover gives Snyder’s-Lance a more formidable stable of brands, adding Diamond’s nuts, chips and Pop Secret Popcorn businesses to its lineup of Cape Cod chips, Lance crackers and Snyder’s of Hanover pretzels. Snyder’s-Lance also said the acquisition will strengthen its store-delivery network in the U.S. and help the company expand in the U.K. and across Europe. The company forecast annual cost-savings of $75 million and said the purchase will boost earnings per share in 2016.

The deal illustrates how San Francisco-based Diamond evolved from a fast-growing company built via acquisitions to a takeover target. Diamond’s bid to buy Pringles from former owner Procter & Gamble Co. in 2012 was derailed after an accounting probe forced it to restate earnings, leading to the ouster of then-Chief Executive Officer Michael J. Mendes. Cereal maker Kellogg Co. snatched up Pringles instead. Diamond agreed to pay $5 million last year to settle U.S. regulatory claims that former executives underreported walnut costs to raise profit.

Shares of Diamond Foods rose 6.4 percent to $37.12 at 9:57 a.m. in New York. The shares had gained 24 percent this year through Tuesday’s close, including a 6.6 percent increase on Friday after the New York Post said Kellogg was in late-stage talks to buy the company. Snyder’s-Lance shares slumped as much as 11 percent to $32.20, the biggest intraday drop since February 2011.

Both boards have approved the transaction, and Oaktree Capital, Diamond’s largest shareholder, will vote in favor of the deal.

Snyder’s-Lance, based in Charlotte, North Carolina-based, is the product of the 2010 merger of two snack makers, Lance Inc. and Snyder’s of Hanover. Both companies have roots dating back to before World War I.

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