Kellogg (K) said on Friday it would buy the owner of RXBAR protein bars for $600 million as the world’s largest cereal maker looks to expand its portfolio of healthier foods and tap millennial customers.
RXBAR, which is owned by Chicago Bar, will continue to operate independently after the deal, Kellogg said in a statement.
Kellogg like other processed food makers, has been battling weak sales amid a growing consumer preference for healthier foods, and has been making changes to its offerings by removing artificial ingredients and introducing healthier foods such as granola.
“With its strong millennial consumption and diversified channel presence including e-commerce, RXBAR is perfectly positioned to perform well against future food trends,” Kellogg CEO Steve Cahillane said.
Kellogg said it will pay about $400 million net of tax benefits for the company and RXBAR’s net sales are expected to be about $120 million in 2017.