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Malt-O-Meal maker is being taken over – and customers could pay the price

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The Minnesota-based maker of the budget cereal brand Malt-O-Meal is currently the subject of a $1.15 billion takeover by a competitor, and some food groups are not happy about it.

The Pioneer Press reports a coalition of 22 food and consumer organizations are objecting to the merger of MOM Brands, based in Lakeville, with Michigan-based Post Brands – the maker of Fruity Pebbles and Honeycomb cereals.

MOM, known as Malt-O-Meal until 2012, employs 1,500 people – 1,000 of them in Minnesota – and still makes its famous hot wheat cereal in Northfield, the Star Tribune notes.

The move comes at a time when the popularity of cereal as a breakfast choice is falling, and groups objecting to the merger say it would take away even more competition from "one of the least competitive places in the grocery store."

For fans of Malt-O-Meal and other MOM Brands, it could mean prices increase for cereals that are designed to be cheap competitors to more established and well-known brands.

Common Dreams reports that because Post owns some of these more expensive brands, there would not be the same need for MOM cereals to compete with them, so MOM "would be able to unilaterally raise prices on these competing brands."

MOM already has cheaper versions of Post's Fruity Pebbles and Cocoa Pebbles through its Fruity Dyno-Bites and Cocoa Dyno-Bites lines, while its Honey Buzzers cereal competes with Post's Honeycomb, the website notes.

"This proposed merger would join traditional brands, private label, and discount brands, taking choices away from consumers, especially those who are trying to stretch their grocery dollars by shopping for discount brands," said Wenonah Hauter, of Food & Water Watch, on the organization's website.

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The company formerly known as Malt-O-Meal is moving its headquarters from downtown Minneapolis to Lakeville. MOM Brands, the makers of Malt-O-Meal cereals -- will move 100 employees from the IDS Center to the new location by 2014. MOM Brands already has about 200 employees in Lakeville in a technical center it has operated since 2009.

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Firefighters responded to the production plant in Northfield Thursday morning. The Northfield Patch reports residue in duct work and a long chimney near the plant's toaster-puffer ignited. No injuries were reported.