Pet Treats Acquisition
Tyson Foods, a multinational food manufacturing company, announced it is selling its natural pet treats business to General Mills in a $1.2 billion all-cash transaction. Included in the sale are brands like Nudges, Top Chews, and True Chews. An Iowan production facility is included in the deal as well.
According to the press statement from Tyson Foods, each pet treat company contributed more than $240 million in 12 months of sales.
Noelle O’Mara, group president of Prepared Foods for Tyson Foods, said in a statement, “We’re proud of the tremendous success of this business and the diligent work by our team to meet growing demand for high quality pet treats...We believe the time is right to transition these great brands to an established pet foods business where they will complement their existing portfolio.”
General Mills is the parent company to a natural, healthy pet food brand, Blue Buffalo.
As a result of this transaction, the 300 team members currently involved in the Tyson Foods pet treat business will become part of General Mills after the deal is closed. Additionally, while General Mills takes ownership, Tyson Foods will still provide the ingredients.
“By adding these trusted pet treat products to our portfolio, we are strengthening our position in this attractive category. This acquisition is highly complementary to our existing business...We’re excited for the opportunity to provide pet parents with more ways to feed and treat their pets like family.” said Bethany Quam, General Mills Group President, Pet segment, in a statement.
General Mills is expected to receive an estimated $225 million tax benefit, said the company statement. As a result, the effective purchase price of the pet treats business is $975 million. The transaction is expected to be finalized by the end of the 2021 fiscal year.
Barclays has been advising General Mills on its investments.
This new acquisition announcement follows a few days after General Mills announced its new partnership with The National Fish and Wildlife Foundation (NFWF) that enables conservation efforts in the Great Lakes Basin and the Southern Great Plains.
It goes without saying that people love their pets. This love and care for pets is clear as the American Pet Products Association (APPA) reports that in 2020, Americans spent $103.6 billion in this market. Of that figure, $42 billion was spent on food and treats alone. The APPA projects $109.6 billion will be spent on pets in the United States (US).
The COVID-19 pandemic is a potential contributing factor to projected increased sales this year as people have been spending more time at home with their animals. Furthermore, the COVID-19 pandemic disrupted industries across the board; however, animal shelters have experienced some success.
Animal shelter euthanasia dropped 43% last year due to a decreased intake of animals and an increased number of fostering and adoption rates, according to a USA Today report.
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.