Mars Inc. has agreed to acquire about 80 percent of Procter & Gamble Co.'s pet food business, including brands Iams, Eukanuba and Natura in major markets, for $2.9 billion in cash. The deal will significantly increase the size of the Mars Petcare business unit and is the first step toward exiting the category for P&G.
The transaction will include the Procter & Gamble brands in North America, Latin America and other selected countries but not in European Union countries, where P&G has other plans to sell those businesses. The agreement does include an option for Mars to acquire the business in several additional countries.
The companies expect to complete the transaction in the second-half of 2014, subject to regulatory approvals.
“Exiting Pet Care is an important step in our strategy to focus P&G’s portfolio on the core businesses where we can create the most value for consumers and shareowners," said A.G. Lafley, P&G chairman, president and CEO. He returned to the company helm a year ago after a brief retirement with a goal to focus P&G and improve shareholder returns. "The transaction creates value for P&G shareowners, and we are confident that the business will thrive at Mars, a leading company in pet care.”
Mars Petcare already is one of the world’s leading pet food and veterinary care providers and employs more than 35,000 people across 50 countries. Its billion-dollar brands are Pedigree, Whiskas, Banfield and Royal Canin.