General Mills to acquire Blue Buffalo for $8 billion

February 27, 2018

Deal expected to close by the end of General Mills fiscal year.

General Mills has entered an agreement in which the company will acquire Blue Buffalo for $40 per share in cash, or a

value of approximately $8 billion, according to a release from the companies. Blue Buffalo makes food and treats for dogs and cats under its Blue brand, which includes Blue Life Protection Formula, Blue Wilderness, Blue Basics, Blue Freedom and Blue Natural Veterinary Diet.

“The addition of Blue to our family of well-loved brands provides General Mills with the leading position in the large and growing wholesome natural pet food category and represents a significant milestone as we reshape our portfolio to drive additional growth and value creation for our shareholders,” says General Mills CEO Jeff Harmening, MBA, in the release.

“We are competing more effectively in our existing categories by really listening to consumers and providing a variety of options that meet their needs,” Harmening continues. “In pet food, as in human food, consumers are seeking more natural and premium products and we have tremendous respect for how attentive Blue Buffalo has been to the needs of their consumers, pet parents and pets, as they have built their brand. ... We expect to help Blue Buffalo by leveraging our extensive supply chain, R&D and sales and marketing resources. We will in turn benefit from their experience building one of the strongest pull brands in the [consumer packaged goods] world.”

According to the release, General Mills is the third-largest natural and organic food producer in the U.S. with brands that include Annie's, Lärabar, Liberté, Cascadian Farm, Muir Glen and EPIC. After the transaction has been completed, General Mills will operate Blue Buffalo as a new Pet operating segment alongside its four current operating segments: North American Retail, Convenience Stores and Foodservice, Europe and Australia, and Asia and Latin America. It will maintain Blue Buffalo's Wilton, Connecticut, headquarters and its Joplin, Missouri, and Richmond, Indiana, manufacturing and R&D facilities. Blue Buffalo's CEO, Billy Bishop, will continue to lead the business and report to Jeff Harmening, the release states.

The board of directors for both companies have approved the transaction, but it is still subject to regulatory approvals and closing conditions. It is expected to close by the end of General Mills' 2018 fiscal year. Invus LP and founding Bishop family shareholders, who represent more than 50 percent of Blue Buffalo's outstanding shares, have approved the transaction and no other approvals from the board of directors or shareholders is needed to complete the transaction, the release says.