US breakfast cereals giant Post Holdings will buy Michael Foods, which specializes in egg and dairy products, for $2.45 billion, the companies said Thursday. Post Holdings, which has been on a buying spree to diversify its food products portfolio, said the Michael Foods deal was its biggest acquisition to date. The St. Louis, Missouri-based Post Holdings said Michael Foods will continue to be managed by its existing executive team led by chief executive Jim Dwyer. "This acquisition is exactly what we look for in an investment. We are extremely impressed with the job Jim and his team have done and we look forward to continuing to build this substantial business with them," said Bill Stiritz, Post's chairman and CEO. The transaction is expected to be completed by end-June. A manufacturer of iconic cereal brands such as Grape-Nuts and Honeycomb, Post has diversified its product offerings to include protein bars, pasta and other foods and beverages. Michael Foods, based in Minnetonka, Minnesota, is known for specialty egg products, potato products and cheese and other dairy products. Michael Foods reported 2013 earnings of $50.4 million on revenues of $1.95 million, an increase of 67 percent and 50 percent, respectively from 2012. The company is owned 80 percent by GS Capital Partners, a private equity unit of Goldman Sachs, which paid $1.7 billion for the stake in 2010. The remaining 20 percent stake is held by Thomas H. Lee Partners, another private equity firm. Post traces its roots back to 1897, when C.W. Post introduced the ready-to-eat cereal Grape-Nuts. The brand and other brands were brought into one company, General Foods Corporation, which was acquired by Philip Morris in 1985 and through a series of deals was spun off from Ralcorp in 2012. For its 2013 fiscal year that ended September 30, Post reported net earnings of $15.2 million, down 70 percent from the prior year. Net sales rose 7.8 percent to $1.03 billion, with acquisitions accounting for about two thirds of the overall growth. In February, Post finalized acquisitions of Golden Boy Foods, a maker of peanut butter and other nut butters, and Dymatize Enterprises, which makes protein powders and nutritional supplements. Post shares dropped 2.0 percent to $53.67 in midday trade on the New York Stock Exchange. The shares gained 5.6 percent on Wednesday after the first media reports of the deal surfaced. Post was in competition with Tyson Foods to buy Michael Foods, a source close to the situation told AFP on Wednesday.