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P&G sells Iams, Eukanuba, Natura for $2.9 Billion

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Procter & Gamble is selling most of its Iams, Eukanuba and Natura pet food brands to Mars Inc. for $2.9 billion in cash.

According to Cincinnati.com, P&G announced the sale Wednesday, after being in the pet food business for fifteen-years. The company said the deal will allow it to lose a slow performer and generate cash to grow core businesses. The companies expect to complete the transaction in the second-half of 2014, of course all subject to regulatory approvals.

This is a significant strategic move for Mars Petcare, and will likely be a strong complement to its large and growing global Petcare business. Headquartered in Brussels, Belgium, Mars Petcare is one of the world’s leading pet care providers and employs more than 34,000 associates across fifty countries. Mars Petcare has thirty-five brands in total, including three billion-dollar brands - Pedigree® Whiskas® and Royal Canin®. Other leading brands include: KiteKat®, Banfield®, Cesar®, Nutro®, Sheba®, Chappi®, Catsan®, Frolic®, Perfect Fit® and Greenies®.

Mars Petcare Global President, Todd Lachman, said: “We view the addition of the IAMS®, Eukanuba®, and Natura® brands as exceptionally strategic. This acquisition is a perfect fit with our Mars Petcare vision of making A BETTER WORLD FOR PETS™. The deal reinforces our leadership in pet nutrition and veterinary science, attracts world class talent and grows our world leading portfolio."

Procter & Gamble purchased the Iams and Eukanuba brands in 1999 for $2.3 billion, and initially the business grew quickly, but slowed fairly early too. There was lots of competition from other big corporations and smaller independent manufacturers. Add in the increasing costs of raw materials and P&G seemed less and less likely to make big profits off this division. The 2010 purchae of Natura barnds did not dramatically increase profits or growth either.

This deal, if approved, will give Mars about a 20-percent share of the USA pet food market. That is a large share, but still well behind Nestlé-Purina that holds about a 50-percent share.

For the dog show folks, yes, the AKC/Eukanuba National Championships will be held this December in Orlando, Florida.

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