UPDATE 2-P&G selling pet food brands to Mars for $2.9 bln
(New throughout, adds more details on deal, comment from investor)
By Phil Wahba
April 9 (Reuters) - Procter & Gamble Co is selling the bulk of its pet food business to Mars Inc for $2.9 billion to focus more on its personal care and cleaning brands, the companies said on Wednesday.
In an all-cash deal, privately held Mars will buy the Iams brand, as well as Eukanuba and Natura, in the Americas and other selected countries, which account for 80 percent of P&G Pet Care's global sales.
P&G is seeking other buyers for those brands in European Union markets, which were excluded from this deal.
Mars products range from candy like Mars bars and M&M's to food like Uncle Ben's rice and chewing gum Extra and Orbit. Its pet care brands already include Pedigree, Whiska, and Royal Canin, and this deal will boost its market share as it vies with Nestle SA in the pet food market.
Euromonitor International projects the global pet care industry will hit $76.8 billion in sales in 2014.
P&G products include Tide detergent, Gillette razors and Pampers diapers. The company has been under pressure to streamline its business from investors including activist investor William A. Ackman, who took a stake in P&G in 2012.
"Let's be honest. Pet food hasn't moved the needle for P&G," said Matt McCormick, a portfolio manager at Cincinnati-based Bahl & Gaynor Investment Counsel, which owns about 4.2 million P&G shares. "I think P&G needs to shrink to grow," he said. Continuación...