General Mills to buy Tyson Foods’ pet treats business for $1.2bn
General Mills said on Friday that it has agreed to buy Tyson Foods’ pet treats business for $1.2bn in cash.
The deal provides an estimated tax benefit of $225m, equating to an effective purchase price of $975m, the company said. Tyson Foods’ pet treats business includes the Nudges, Top Chews and True Chews brands.
General Mills chairman and chief executive Jeff Harmening said: "This acquisition advances our Accelerate strategy and further reshapes our portfolio for growth by adding an attractive business to our fast-growing Pet platform.
"Today’s announcement reinforces our commitment to using all capital allocation levers - including investment in the business, dividend growth, strategic acquisitions, and share repurchases - to drive top-tier shareholder returns over the long term."
In the year to 3 April 2021, Tyson Foods’ pet treats portfolio generated more than $240m in net sales. As part of the deal, General Mills is also acquiring a manufacturing facility in Independence, Iowa.
The transaction is expected to be modestly accretive to General Mills earnings in the first year following completion, excluding transaction and integration expenses.