General Mills to acquire Blue Buffalo pet products

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General Mills to acquire Blue Buffalo pet products

General Mills, the parent company of brands such as Cheerios, Nature Valley, Haagen-Dazs, Pillsbury, Old El Paso and more, is expanding its portfolio to include pet products. The company announced its acquisition of Blue Buffalo for $40.00 per share in cash, representing a value of approximately $8 billion.

The transaction will allow General Mills to become a leader in the U.S. Wholesome Natural pet food category, which is the fastest-growing portion of the overall pet food market, the Minneapolis-based company said.

"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," General Mills chairman and chief executive officer, Jeff Harmening, said.

Founded in 2002, Wilton, Conn.-based Blue Buffalo specializes in the making of natural foods and treats for dogs and cats under the Blue Brand, which includes Blue Life Protection Formula, Blue Wilderness, Blue Basics, Blue Freedom and Blue Veterinary Diet. The company has generated $1.275 billion in net sales and $319 million in adjusted EBITDA for the fiscal year 2017.

"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," Billy Bishop, Blue Buffalo chief executive officer, said. "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. This transaction creates significant, immediate value for our shareholders, as it recognizes the strength of our competitively advantaged business model. Along with our leadership team, we look forward to working with General Mills to continue growing the Blue brand for many years to come."

The transaction has been approved by both companies' board of directors and is expected to close by the end of General Mills' fiscal 2018.