General Mills has agreed to acquire Whitebridge Pet Brands’ North American cat-food and pet-treats business for $1.45bn.
The US food giant, already home to pet-food assets including Blue Buffalo, has struck a deal to buy the business from Belgium-based private investment company NXMH. The acquisition covers brands including Tiki Pets and Cloud Star.
Jon Nudi, the president of General Mills' pet business in North America, said: “Acquiring the Tiki Pets and Cloud Star portfolio strengthens our commitment in the pet space. These brands complement our Blue Buffalo portfolio and will help us incrementally grow in cat feeding and treats.”
According to General Mills, over the past year, the assets changing hands generated approximately $325m in retail sales, primarily through “pet specialty and e-commerce channels”.
As part of the deal, General Mills will take over two manufacturing facilities in Joplin, Missouri.
However, the deal does not include Whitebridge’s European portfolio, which will remain under the ownership of NXMH. The European business primarily consists of the Schesir, ADoC, and Stuzzy brands, along with their related operations.
General Mills has been reshaping its business in recent years under its so-called "Accelerate" strategy, which is aiming for "sustainable, profitable growth and top-tier shareholder returns over the long term".
In September, the company sold its US and Canadian yogurt businesses to Lactalis and Sodiaal respectively. The deals were struck for a total of $2.1bn.
General Mills expects the Whitebridge transaction to close in the third quarter of fiscal 2025.
The acquisition marks General Mills’ fifth acquisition in the pet segment. The company entered the market in 2018 with the $8bn purchase of Blue Buffalo.
In the year to 26 May, net sales of $19.9bn were down 1% from the prior year, while operating profit of $3.4bn essentially matched year-ago results. Adjusted operating profit of $3.6bn was up 4%.
General Mills reported a 1% decline in net sales to $4.8bn for the first quarter of its new financial year. Sales in the period ending 25 August were impacted by “unfavourable net price realisation and mix”.
The company’s organic net sales also dropped 1% during the quarter.
Net earnings attributed to General Mills decreased 14% to $580m, with diluted EPS down 10% to $1.03, attributed primarily “to lower operating profit, higher interest expenses, and a higher effective tax rate”, partly offset by fewer outstanding shares.
Operating profit declined 11% to $832m, driven by reduced gross profit and higher selling, general, and administrative (SG&A) costs, including increased media spending.
