February 29, 2012 / 11:51 PM / 8 years ago

UPDATE 1-General Mills buys small maker of tortilla chips

Feb 29 (Reuters) - Food company General Mills Inc pushed further into the U.S. snack food market by acquiring chip maker Food Should Taste Good.

General Mills already competes in the salty snack market with its brands Chex Mix, Gardettos and Bugles .

The acquisition of Food Should Taste Good — which makes sweet potato chips and tortilla chips in flavors like lime, olive and jalapeno — puts General Mills into the natural and organic segment of that market.

Terms of the deal, which closed on Wednesday, were not disclosed.

The transaction also puts General Mills into more direct competition with the likes of PepsiCo’s Frito-Lay, Diamond Foods Inc, which owns Kettle chips, and Kellogg, which will soon own Pringles.

General Mills, whose other brands include Cheerios cereal, Nature Valley granola bars and Betty Crocker cake mixes, already competes fiercely with Kellogg, which makes Corn Flakes cereal and Kashi bars.

General Mills cut its 2012 outlook earlier this month, citing weak sales volume.

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