Mars, Inc. reported agreeing to buy the IAMS, EUKANUBA, and NATURA brands from Procter & Gamble Co. (PG) for $2.9 billion cash. The transaction may close in the second half of 2014.
Mars Petcare, a pet food and veterinary care provider, employs over 35,000 Associates across 50 countries. Following the transaction closure, IAMS, EUKANUBA, and NATURA brands would join Mars Petcare's billion dollar stable mates PEDIGREE, WHISKAS, BANFIELD, and ROYAL CANIN, the company said.
Accounting for nearly 80% of P&G Pet Care's global sales, the acquisition includes regions like North America, Latin America and other selected countries. The deal also includes an option for Mars to purchase the business in several additional countries. Markets excluded from the transaction are mainly European Union countries. Further, P&G announced developing alternate plans to sell its Pet Care business in these markets.
As a result of this transaction, P&G would begin reporting the global Pet Care business' results as discontinued operations as of the April-June 2014 quarter. Therefore, P&G expects to restate earnings of around $0.03 and $0.04 per share from core earnings to discontinued operations for fiscal years 2013 and 2014, respectively, leaving its fiscal 2014 core earnings per share growth rate guidance unchanged. The company said the one-time earnings impact from the sale and ongoing earnings per share dilution are not likely to materially impact fiscal 2015 results.
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