160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! CHICAGO – Kraft Foods Inc. agreed to sell its two dozen Post cereals to Ralcorp Holdings Inc. Thursday in a nearly $1.7billion stock deal that will make the private-label food maker a major player in the cereal market. The acquisition, expected to be completed in mid-2008, catapults the maker of store-brand cereal into the No.3 position behind industry leaders Kellogg Co. and General Mills Inc. “This acquisition is indeed a watershed event for Ralcorp,” said Kevin Hunt, the St. Louis-based company’s co-CEO. But industry observers said Ralcorp faces an uphill battle to foster, market and develop brand-name cereals such as Spoon Size Shredded Wheat, Raisin Bran, Honeycomb and Pebbles. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREStriving toward a more perfect me: Doug McIntyre “I don’t recall a branded company being able to run private label or a private label being effectively able to run brands,” Deutsche Bank analyst Eric Katzman said. The tax-free transaction will boost Ralcorp’s 2007 sales by 50percent to $3.3billion a year from $2.2billion, with Post cereals accounting for about 32percent of total annual sales.