After more than 90 years, Shredded Wheat will no longer be made in Niagara Falls, N.Y.
Under a deal announced today, Kraft General Foods Inc. will purchase the ready-to-eat cold cereal business of RJR Nabisco Holdings Corp. for $450 million.
The deal would cause production of Shredded Wheat to move to Niagara Falls, Ont., and Naperville, Ill., because Nabisco is not selling its factory in Niagara Falls, N.Y. That plant will stop producing the popular wheat cereal and concentrate solely on making Triscuit snack crackers, officials said.
They added that Nabisco decided to retain the Niagara Falls, N.Y., facility because it is equipped to turn out both cereal and crackers.
Today's announcement didn't come as a total surprise to the 250 people who work at the plant, where Shredded Wheat has been made for 91 years.
In September, a similar buyout of Nabisco's cereal businesses by General Mills was announced. However, that deal fell through because the two companies feared that federal officials would say General Mills was trying to monopolize the cold cereal industry.
The terms of the new buyout by Kraft are similar to the earlier deal Nabisco negotiated with General Mills.
Kraft said it will incorporate the Nabisco lines of Shredded Wheat, Spoon-Sized Shredded Wheat and Shreddies into its Post line of breakfast cereals.
"We believe that this acquisition is strategically significant for us," said Richard Mayer, chairman and chief executive of Kraft General Foods, North America.
"The ready-to-eat cereal category has great potential for expanded growth and operating income," he said.