US – American multinational manufacturer and marketer of branded consumer foods General Mills has announced plans to acquire Tyson Foods, Inc.’s pet food business for $1.2 billion to strengthen its position in the rapidly expanding category.
General Mills entered the pet food category in 2018 when it acquired Blue Buffalo Pet Products, Inc. for approximately US$8 billion.
Since then, the pet food market has been rapidly expanding thanks to a rise in the number of American homes that own pets.
“Pet food is a high-growth category, fueled by the humanization of pets, a trend that has only increased during the pandemic,” said Bethany Quam, General Mills group president, Pet segment.
“By adding these trusted pet treat products to our portfolio, we are strengthening our position in this attractive category.
Tyson Foods’ pet food business had sales of more than US$240 million during the 12 months ended April 3, according to the company.
General Mills said the transaction – which includes a manufacturing plant in Iowa-will provide an estimated tax benefit of US$225 million, equating to an effective purchase price of US$975 million.
“This acquisition is highly complementary to our existing business, combining Blue’s leading position in natural pet food with Nudges, Top Chews, and True Chews strong portfolio of natural meat treats for pets.”
General Mills said the transaction is expected to be modestly accretive to its earnings in the first 12 months following completion.
Kraft Heinz to acquire Primal Kitchen for $200 million
Meanwhile, The Kraft Heinz Co. has entered into a definitive agreement to acquire Primal Nutrition, L.L.C., the maker of Primal Kitchen branded products, for approximately US$200 million as part of efforts to expands its product portfolio.
Founded in 2015 by Mark Sisson and Morgan Buehler, Primal Kitchen offers a range of better-for-you condiments, sauces, dressings and snacks.
According to a disclosure by Kraft Heinz, the business is expected to generate approximately US$50 million in net sales this year.
“The proposed partnership with Primal Kitchen is consistent with Kraft Heinz’s vision to be the best food company, growing a better world,” said Paulo Basilio, U.S. Zone president for Kraft Heinz.
“The Primal Kitchen team has built an amazing portfolio of the world’s best-tasting, health-enhancing, real-food pantry staples. We are excited to partner with the company’s strong existing team to drive growth across multiple categories going forward.”
Following the acquisition, Primal Kitchen will join Kraft Heinz’s Springboard platform which was launched in March as a platform “dedicated to nurturing, scaling and accelerating growth of disruptive U.S. brands within the food and beverage space.”
The business will however continue to operate under its current leadership team at its headquarters in Oxnard, Calif., while benefitting from Kraft Heinz’s assets and infrastructure.
The transaction remains subject to customary closing conditions and is expected to close in early 2019.
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