General Mills, the company behind Cheerios and Betty Crocker, announced on Friday Feb. 23, they will acquire Blue Buffalo Pet Products for $40 per share in cash, bringing the value of the purchase to roughly $8 million. The deal will close at the end of 2018.
General Mills plans to operate Blue Buffalo as a new pet segment and will maintain the company’s headquarters in Wilton, Connecticut as well as its Joplin, Missouri and Richmond, Indiana manufacturing and R&D facilities. Blue Buffalo CEO, Billy Bishop, will continue to lead the business and report to Jeff Harmening.
“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 CEO, Jeff Harmening.
“In pet food, as in human food, consumers are seeking more natural and premium products, and we have tremendous respect for how attentive Blue Buffalo has been to the needs of their consumers, pet parents and pets, as they have built their brand. As we have done with Annie’s, Lärabar and EPIC, we expect to help Blue Buffalo by leveraging our extensive supply chain, R&D and sales and marketing resources. We will in turn benefit from their experience building one of the strongest pull brands in the CPG world,” Harmening said.
“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 more than 1,700 ‘Buffs’ joins this new extended family,” said Billy Bishop, Blue Buffalo CEO.
General Mills is the latest company after Mars and J. M. Smucker to make investments in the pet industry. According to CNBC, traditional food companies are strengthening their positions in the market after Kraft-Heinz backer, 3G Capital, known for “its ferocious acquisitions” of food companies and ruthless cost-cutting thereafter, suggested it was ready to make another acquisition and identified General Mills as a possible target.