Kellogg Cuts Share Buyback Plan As It Buys Brazilian Biscuit Maker

Kellogg Co. said Thursday it was reducing how much it plans to spend on share repurchases in 2016, in an effort "preserve financial flexibility" while it acquires Brazilian biscuit maker Parati Group. The breakfast foods giant said it now plans to spend $450 million to $550 million on buybacks this year, down from previous plans of $700 million to $750 million. Regarding Parati Group, Kellogg is paying the equivalent of $429 million in cash. The company expects the deal to be neutral to earnings in 2016 and 2017, add to earnings in 2018 and beyond. "Brazil is the largest economy in Latin America and this acquisition will allow us to accelerate our growth and improve our margins in the region," said Kellogg Chief Executive John Bryant. The stock, which was still inactive in premarket trade, has gained 5.8% year to date, while the S&P 500 has tacked on 4.7%.