Tyson Foods announced Friday (May 14) plans to sell its pet treats business to General Mills for about $1.2 billion. Included in the cash deal will be a processing plant in Independence, Iowa, that makes Nudges, True Choices and Top Chew treats. The plant has around 300 employees.
Tyson said it will continue to provide the meat ingredients for the pet treats business after the deal is completed later this year. The transaction is subject to regulatory approval and other customary closing conditions.
“We’re proud of the tremendous success of this business and the diligent work by our team to meet growing demand for high quality pet treats,” said Noelle O’Mara, group president of Prepared Foods for Tyson Foods. “We believe the time is right to transition these great brands to an established pet foods business where they will complement their existing portfolio.”
Tyson said the pet treat business generated more than $240 million in sales in the year ended April 3. The market fundamentals are strong in this burgeoning industry amid a growing pet ownership boom during the pandemic as pet adoption rates at U.S. shelters jumped 40% in 2020 from the previous year.
“Pet food is a high-growth category, fueled by the humanization of pets, a trend that has only increased during the pandemic,” said Bethany Quam, General Mills’ pet food segment president.
The Springdale-based meat giant said it entered the pet treat market in 2010 with the launch of True Chews and expanded with the Nudges brand in 2011 and Top Chews in 2012. The deal follows General Mills’ 2018 acquisition of Blue Buffalo for $8 billion which was the cereal king’s first bet in the pet foods segment. For the nine months ended Feb. 28, General Mills said its pet foods business sales rose 13%.
“This acquisition advances our accelerated strategy and further reshapes our portfolio for growth by adding an attractive business to our fast-growing Pet platform,” said General Mills Chairman and CEO Jeff Harmening.