Some news on the pet food front: Mars is buying Procter & Gamble’s pet food brands that include Iams, Eukanuba and Natura. Interesting that the company, which owns candies like M&M’s, Snickers as well as pet food brands Pedigree, Royal Canin, Nutro, Greenies, in addition to the Banfield Pet Hospitals, just increased their holdings on the pet food market. Wondering why this happened? P&G only just recently purchased Natura, but perhaps the handling of a large-scale recall of that brand in 2013, was more costly to their bottom line than they had anticipated. We did find it difficult to get timely information from them on these series of recalls, which just seem to escalate from month to month. Perhaps too they were surprised about the scale of the backlash that the news of their purchase of Natura caused. It will be interesting to see how Mars will handle customer confidence in their new acquisitions, as well as their other brands too.
Here's the story from Pet Age, a pet industry magazine.
The strategic move for Mars Petcare will expand its already large portfolio of pet brands, and signals Proctor & Gamble’s move to reduce its pet segment.
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“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,” A.G. Lafley, P&G’s chairman, president and chief executive officer, said. “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.”
The geographic regions included in the acquisition, which account for approximately 80 percent of P&G Pet Care’s global sales, include North America, Latin America and other selected countries. The agreement includes an option for Mars to acquire the business in several additional countries. Markets not included in the transaction are primarily European Union countries.
P&G said it is developing alternate plans to sell its Pet Care business in these markets.
“This acquisition is a perfect fit with our Mars Petcare vision of making A Better World For Pets,” Todd Lachman, Mars Petcare global president, said. “The deal reinforces our leadership in pet nutrition and veterinary science, attracts world class talent and grows our world leading portfolio.”
The companies expect to complete the transaction in the second-half of 2014, subject to regulatory approvals.