Procter & Gamble Buying Pet Food Co.
CINCINNATI (AP) _ Procter & Gamble Co. is jumping into the lucrative pet nutrition business by buying pet food maker Iams Co. for $2.3 billion, P&G’s biggest purchase ever.
P&G officials said today they intend to expand Iams’ pet food sales in foreign markets. Iams’ international sales now represent about 30 percent of the company’s total revenues, even though two-thirds of the global pet nutrition market exists outside of North America.
The global pet food market is estimated at $25 billion. The premium segment now is 10 percent of the market but is the fastest-growing segment, and Iams is a leader in that category, P&G said.
The deal is subject to U.S. and international regulatory approvals but should be completed within the next several weeks, P&G said.
Cincinnati-based P&G makes a variety of consumer products, including Tide detergent and Pampers diapers, and had 1998 sales of $38.1 billion.
The privately held Iams sells Eukanaba and Iams premium dog and cat foods, dry and canned varieties, in 77 countries. It had 1998 sales of more than $800 million.
P&G appointed Jeff Ansell, who has been vice president for the baby care business in North America, as president of Iams Co. Clay Mathile, chairman and owner of Iams, will continue to play a key role in managing the business, P&G said.
P&G said in June that acquisitions will be part of the company’s strategy for increasing its worldwide business. Entering the global pet health and nutrition business with Iams is a first step, it said in a statement.
Shares of P&G were down $1 to $92.75 in late morning trading on the New York Stock Exchange.