US consumer goods manufacturer General Mills has announced that it will be acquiring Blue Buffalo Pet Products in a deal worth approximately $8bn.
The acquisition will see General Mills paying $40 per Blue Buffalo share in an all cash deal, equating to a 17.2% premium on the companies unaffected share price.
“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.
“From the first meeting Jeff and I had, I felt a strong cultural fit between our two companies and believe they will be a great partner in our mission to reach more pet parents and feed more pets.”
The transaction significantly diversifies General Mills’ portfolio, becoming a leader US natural pet food provider – the fastest growing portion of the pet foods market.
“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,” said General Mills Chairman and Chief Executive Officer, Jeff Harmening.
The Blue brand recorded $1.275bn in net sales for the fiscal year 2017, having delivered an annual growth of net sales of 12%.