Speculation surrounds the future of Norfolk crisps manufacturer Kettle Foods following reports that its American parent company could be bought by Kellogg.

The cereals giant, renowned for brands such as Corn Flakes, Crunchy Nut and Rice Krispies, is said to be eyeing a $1.5bn takeover of Kettle Foods owner Diamond Foods, according to reports in the United States.

Diamond Foods, which owns the Kettle Foods operations in US and its UK operation based at Bowthorpe near Norwich, is said to be in 'late-stage talks' with Kellogg, a report by the New York Post stated.

It comes after Kellogg snapped up crisp business Pringles from Procter & Gamble for $2.7bn in 2012. It was sealed after a $1.7bn deal for Diamond Foods to buy Pringles collapsed when Diamond became embroiled in an accounting scandal.

In February, Diamond Foods announced that it had taken a 51pc stake in Dutch firm Yellow Chips as it looked to break into the growing market for vegetable crisps.

The announcement was followed in August by a top-level shake up, which saw managing director Dominic Lowe replaced with Ashley Hicks, Tesco Hungary's commercial director.

Kettle Foods UK's latest set of accounts revealed that it had boosted its market share to 4.5pc in 2014, as it continued its strategy of selling crisps on promotion to combat rising cost pressures.

The move to maintain the amount of crisps sold on discount saw it take a further 0.6pc slice of the market volume, helping turnover to rise £2.7m to £83.9m for the year ending July 31 2014.

The improved financial picture was also reflected in the company's pre-tax profits which grew £2.8m to £12m over the same period. In 2013, profits were knocked back by a £2.57m one-off cost to fund a business improvement programme. The number of people employed by the company fell from 495 to 477 last year.

Kettle Foods and Kellogg UK declined to comment on the reports.

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