Blue Buffalo sells business to General Mills
The owners of Wilton-based Blue Buffalo Pet Products Inc. announced in a letter to their customers Feb. 23 on Facebook that they have sold the business to cereal giant General Mills.
General Mills is also the owner of organic brands including Annie’s, Cascadian Farm, Larabar and Epic Foods, so it is not just a breakfast food company, the owners said.
“This new partnership will allow Blue Buffalo to continue to provide the finest natural foods and treats for our furry family members as well as help us develop new and exciting product innovations,” read the letter, signed by owners Bill, Billy and Chris Bishop.
“In addition, General Mills shares our single-minded focus on product quality, and fully supports our “giving back” initiatives in Pet Cancer Research, and providing Service Dogs for Military Veterans,” the letter read.
“Thank you for being a Blue Buffalo pet parent, and we look forward to feeding your pet like family for years to come,” the letter concluded.
The company officials did not return a message left seeking information about the local future of the operation. However, the Associated Press reported that General Mills indicated once the deal closes, Blue Buffalo will be run as a new pet operating segment, and it will continue to operate out of its Wilton headquarters.
Multiple wire news reports reported the deal at $8 billion, saying It's a return to pet business for the 150-year-old General Mills, which sold food for cats, dogs and birds back in the 1950s.
Blue Buffalo had nearly $1.3 billion in net sales last year, the wire reports indicated.
General Mills has suffered three consecutive years of declining revenue as it follows customers seeking more fresh food on the dinner table, according to the Associated Press.
As it transitions to accommodate changing tastes, General Mills said the Blue Buffalo acquisition will become accretive by fiscal 2020, meaning it will increase gradually.
General Mills Inc. will pay $40 per Blue Buffalo share. That's a 17% premium to the pet food company's Thursday closing price of $34.12.
Shares of Blue Buffalo surged more than 16% to $39.82 Friday morning. General Mills Inc. shares fell 5% to $52.08.
The acquisition is targeted to close by the end of General Mills' fiscal year 2018.