The move comes as Procter & Gamble looks to more closely focus its business on cosmetics and healthcare products.
P&G shareholders will retain a 57% stake in the new company while Diamond shareholders will hold the rest.
Diamond shareholders will also take on $850 million of Pringles debt. Diamond, best known for its Emerald brand of nuts and trail mixes, Pop Secret popcorns and Kettle potato chips, will more than triple the size of its snack business with the addition of Pringles. The company now expects net revenue to total $1.8 billion in the fiscal year ending July 31, 2012. Diamond has been expanding through acquisitions in recent years.