Cereal giant General Mills Inc. has decided to purchase Tyson Foods for USD 1.2 billion in cash. The move is aimed at making its pet food portfolio more diversified. The company is focusing on this division because more and more people are adopting cats and dogs. With the deal, there will be the addition of Nudges, Top Chews, and True Chews brands to the portfolio of the company. General Mills already has Blue Buffalo pet foods label. The company purchased it for USD 8 billion in 2018. The company has been looking to build a strong portfolio in the fast-growing pet foods segment ever since. Headquartered in Minneapolis, Minnesota, USA, General Mills says that it aims to make foods that are loved by people. Some of the famous brands of General Mills are Cheerios, Progresso, Annie’s, Häagen-Dazs, Yoplait, Nature Valley, and more.
The three-year-old bet paid off well for the company after the coronavirus pandemic struck last year. As the pandemic-induced lockdown forced more and more people to stay indoors, many adopted pets to help relieve stress. These people are opting for premium quality foods for their pets. According to data, animal shelters in the United States have seen a jump in the adoption rate of around 40 per cent in 2020 over the previous year. General Mills’ pet food segment president Bethany Quam said that pet food is among the high growth category because of the humanization of pets. “We have witnessed an increase in this trend during the COVID-19 pandemic.
Several pet foods company have witnessed a rise in the sale of their products. While General Mill’s pet food has registered a growth of 13 per cent for nine months ending February 28, Tyson Foods’ pet treats portfolio had sales of USD 24 million in the 12 months ended April 3. General Mills believes that the acquisition of Tyson Foods will modestly add to its net income within one year of the deal. The deal is expected to be finalized in the first quarter of the next fiscal year. As part of the deal, General Mill will also acquire a manufacturing facility in Independence, Iowa. The deal will be funded in cash and short-term borrowing. Commenting on the development, Tyson Foods said that even after being acquired by General Mills, it will continue to provide meat ingredients for the pet treats business.