Boston, MA 04/17/2014 (wallstreetpr) – The Procter & Gamble Company (NYSE:PG), the American multinational consumer goods company has opted to exit pet food market by selling its pet care divisions to Mars Inc. As per the deal, Mars Inc. will pay $2.9 Billion to P&G for the pet food brands. Mars, which is involved in manufacturing of food products at the global level, has been ranked by Forbes as the third largest privately owned company of the US.
P&G were represented by the law firm Jones Day and Mars Inc. by SkaddenArps. Currently, Mars and P&G hold a share of 14.6% and 8.8% in the US pet food market respectively. P&G is also said to be looking for other buyers in European market.
P&G to focus on personal products
The Procter & Gamble Company (NYSE:PG) has decided to quit pet food market as its annual sales has gradually declined in successive years due to stiff competition .Also, P&G is now focusing on its personal care products segment and launching new products for company’s growth. The company is also going for a job cutting program for cost cutting due to pressure by its investors. The deal is subject to regulatory approvals and is expected to be finalised by 2Q2014.
Mars to emerge as a strong player in Pet care market
Mars has witnessed an increase of 10% in its annual sales in FY2013, with the annual sales reaching $33 Billion as compared to $30 Billion in FY2012. The company aims to expand its business in the pet food segment and increase its market share. Currently, Mars has Pedigree, Whiska and Royal Canin brands in the pet care segment. According to the deal, The Procter & Gamble Company (NYSE:PG) will sell its Iams, Eukanuba and Natura brand marketed in America and other few countries across the world to Mars. Post the deal, mars will be able to sell all these brands across the markets and strengthen its position in the pet care market.
