Tyson Foods is selling its pet treats business to General Mills for approximately $1.2 billion in cash.
The sale includes the Nudges, True Chew and Top Chews brands, and a production facility in Independence, IA. Approximately 300 Tyson associates will become General Mills employees.
The pet care segment has done well during the pandemic as more socially distancing consumers brought pets into their homes. The industry recorded more than $100 billion in annual sales in 2020, according to trade group The American Pet Products Association (APPA), and is expected to grow another 5.8% this year.
The pet food and treats segment grew 9.7% last year, to $42 billion, according to APPA. Tyson, which is the No. 9 publicly owned consumer goods company, said its own pet treats business generated more than $240 million in pet care sales in the 12-month period ending April 3, 2021.
General Mills has its own pet care brand, Blue, and Bethany Quam, group president of General Mills’ pet segment, called the acquisition highly complementary.
The deal is expected to close by the end of Tyson’s 2021 fiscal year, and the company will continue to provide meat ingredients for the pet treats business after General Mills assumes ownership.
“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,” said Noelle O’Mara, Tyson Foods group president of prepared foods, in a statement. “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 chairman and CEO Jeff Harmening said the deal advances its Accelerate strategy and reshapes its portfolio for growth with the addition of an attractive business to its 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," he noted.
Tyson Foods launched True Chews dog treats in 2010, marking its entry into the category, and later expanded to the other two brands.
General Mills is the No. 35 consumers goods company, according to CGT's most recent Top 100 ranking.