Make room for a side of tater tots with your cereal.
Post Holdings, which makes popular cereals such as Raisin Bran and Fruity Pebbles, reportedly held recent deal talks with packaged foods giant ConAgra Foods regarding the latter’s frozen-potato business. According to the Wall Street Journal, those talks—which sputtered out but could still be revived—revolved around the prospect of Post combining with the ConAgra subsidiary Lamb Weston, which makes a range of frozen potato products—from fries to tots—as well as various frozen appetizers.
The Journal reports that the deal—which would be structured as something called a Reverse Morris Trust, where a company carves out one of its subsidiaries and then merges it with another company—would value Lamb Weston at roughly $6 billion. Shares of Post rose slightly Tuesday following the report, pushing the cereal-maker’s market value over $5 billion.
Fortune reached out to both Post and ConAgra for comment and will update this article with any response.
It was only five years ago that ConAgra had Post in its sights as part of its proposed deal to acquire Ralcorp, which was Post’s parent company at the time. Instead, Ralcorp spun off Post to its shareholders a year before ConAgra eventually did acquire Ralcorp in a 2012 deal worth almost $5 billion.
However, ConAgra’s new CEO, Sean Connolly, has been busy cutting costs in what analysts assume is preparation for a sale of the packaged foods company. Last summer, ConAgra sold off the struggling private label business it acquired in the Ralcorp deal and Connolly has also reportedly been considering a spin-off of Lamb Weston for months.
Meanwhile, Post has been expanding its business through acquisitions such as last year’s $1 billion deal for MOM Brands, which makes bagged and hot cereals, as well as a 2014 deal to acquire Michael Foods for $2.45 billion.