General Mills to Acquire Annie's

Sept. 9, 2014
$820 million acquisition will expand General Mills’ fast-growing natural and organic foods business.

General Mills Inc. on Sept. 8 announced an agreement to acquire Annie’s Inc., a well-known producer of organic and natural food products, for $820 million. Annie's had sales of $204 million in its most recent fiscal year, which ended this March.

Annie’s will join several natural or organic brands General Mills has assembled, mostly through acquisition, over the years: Cascadian Farm, Muir Glen, Larabar and Food Should Taste Good. Net sales for these General Mills brands totaled approximately $330 million in Big G's latest fiscal year (ended May 25).

High growth is what General Mills appears to be after, following a fiscal 2014 in which company-wide sales grew less than 1 percent (to $17.9 billion) and net earnings dipped 1.6 percent (to $1.824 billion).

“This acquisition will significantly expand our presence in the U.S. branded organic and natural foods industry, where sales have been growing at a 12 percent compound rate over the last 10 years," said Jeff Harmening, General Mills' executive vice president and chief operating officer.

"Annie’s competes in a number of attractive food categories, with particular strength in convenient meals and snacks --- two of General Mills’ priority platformsm," he continued. "Consumers know and trust Annie’s purpose-driven culture and authentic brand. We believe that combining the Annie’s product portfolio and go-to-market capabilities with General Mills’ supply chain, sales and marketing resources will accelerate the growth of our organic and natural foods business.”

Headquartered in Berkeley, Calif., Annie’s is perhaps best known for its bunny-shaped snacks and macaroni and cheese. Founded in 1989, Annie’s markets more than 145 products and is present in more than 35,000 retail locations in the U.S. and Canada.

Annie’s, a public company, will be bought for $46 per share in cash. The company's board of directors unanimously recommended that Annie’s stockholders accept the General Mills offer.

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