Seeking Alpha

Procter & Gamble sells well-known pet brands to Mars

Mars plans to buy a series of Procter & Gamble (PG) pet food brands for $2.9B.

P&G unloads the Iams, Eukenaba, and Natura brands as part of the deal.

As a result of the sale, P&G will begin reporting results for its global pet care business as a discontinued operation starting in Q2.

The pile of cash from the deal will go to general corporate purposes, says P&G for now.

PG +0.5% premarket

From other sites
Comments (8)
  • Ben Hanson
    , contributor
    Comments (522) | Send Message
    Mars is on my list of great companies I wish would just go public already.
    9 Apr 2014, 12:18 PM Reply Like
  • Larry Smith
    , contributor
    Comments (2976) | Send Message
    Unloading the pet food business was a smart move. Many players, little growth and they were not the dominant player. It seems, they got a good price.
    9 Apr 2014, 12:31 PM Reply Like
  • Geotovore
    , contributor
    Comments (15) | Send Message
    Iams is one of their billion dollar brands, don't you think they could have gotten a little more for that? Not a rhetorical question, I really don't know.
    9 Apr 2014, 12:42 PM Reply Like
  • Larry Smith
    , contributor
    Comments (2976) | Send Message
    Fair question. I have attached a link that shows how fragmented the dog food business is. No one really has a dominant share and competition is fierce.



    They may have had a billion dollar in sales, but pet profits make a small portion of P&G profits. Keep in mind sale is not for the entire business, European countries were left out.


    The geographic regions included in the acquisition, which account for approximately 80% of P&G Pet Care’s global sales, include North America, Latin America and other selected countries. The agreement includes an option for Mars to acquire the business in several additional countries. Markets not included in the transaction are primarily European Union countries. P&G said it is developing alternate plans to sell its Pet Care business in these markets.
    9 Apr 2014, 03:17 PM Reply Like
  • YeahOkSure
    , contributor
    Comment (1) | Send Message
    2.9 billion for those 3 brands is an excellent price. Glad to be a long time PG shareholder. They are an brillantly run company
    9 Apr 2014, 03:23 PM Reply Like
  • Geotovore
    , contributor
    Comments (15) | Send Message
    Thanks for the information, Larry!
    9 Apr 2014, 10:35 PM Reply Like
  • Degenerate Gambler
    , contributor
    Comments (986) | Send Message
    BRK owns part of Mars. So you could buy BRK to own some of Mars. How much is unknown.
    9 Apr 2014, 03:03 PM Reply Like
  • bsinn
    , contributor
    Comments (7) | Send Message
    As I recall, the pet food business segments by channel of distribution. Mass/grocery/club is the lowest priced and dominated mostly by Nestle. Pet Speciality ( Pet Smart , Petco, and Tractor Supply) with a more premium priced product. And finally there is professional dominated by VCA Antech and local vet practices ( highest margin) . In the USA, Mars was strong in the mass segment and relatively weak in the others. This should give them greater presence in the higher margin segments. Colgate will become an more important competitor since it owns Hill's Science Diet. Seems like a good move for Mars. Not sure if BRK is a way to invest in Mars. I believe the Oracle just made a loan to the Mars family to buy Wrigley.
    9 Apr 2014, 04:54 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs