General Mills gets pet friendly with the purchase of Blue Buffalo Pet Products Inc. for about $8 billion. The company plans to pay $40 a share for Blue Buffalo, the maker of natural dog and cat food and treats.
“In pet food, as in human food, consumers are seeking more natural and premium products,” said Jeff Harmening, General Mills Chairman and Chief Executive Officer, in a statement.
This purchase will land General Mills first place as leader in the U.S. Wholesome Natural pet food category, the fastest growing segment in the pet food market. With a list that includes Cheerios cereal, Yoplait yogurt and Haagen-Dazs ice cream, this transaction will also help its shifting portfolio strategy.
“The addition of BLUE to our family of well-loved brands provides General Mills with the leading position in the large and growing Wholesome Natural pet food category and represents a significant milestone as we reshape our portfolio to drive additional growth and value creation for our shareholders,” Harmening said in a statement.
BLUE is the number one wholesome natural pet food brand
Founded in 2002, Blue Buffalo sells under the BLUE brand, including BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom and BLUE Natural Veterinary Diet. BLUE is the #1 Wholesome Natural pet food brand in the U.S. with $1.275 billion in net sales and is one of the fastest growing pet food companies making natural foods and treats for dogs and cats.
“I have been impressed by General Mills’ strong track record of accelerating growth for its natural and organic brands, while giving them the freedom to maintain their own unique culture and identity. General Mills will be a tremendous home for our BLUE brand as our talented team of over 1,700 ‘Buffs’ joins this new extended family,” said Billy Bishop, Blue Buffalo Chief Executive Officer, in a statement.
According to the Minneapolis based food company, General Mills will operate Blue Buffalo as a new Pet operating segment alongside its four current operating segments: North American Retail, Convenience Stores & Foodservice, Europe & Australia, and Asia & Latin America. General Mills also expects to maintain Blue Buffalo’s Wilton, Connecticut headquarters and its Joplin, Missouri and Richmond, Indiana manufacturing and R&D facilities.