Blog: Katy AskewJM Smucker continues diversification with pet food buy

Katy Askew | 4 February 2015

US jam, peanut butter and coffee maker JM Smucker has continued its diversification drive with a deal to acquire Big Heart Pet Brands, formerly part of Del Monte Foods, in a deal worth more than US$5.8bn.

Through the acquisition Smucker gains access to the $21bn pet food category with leading brands including Meow Mix and Milk-Bone.

Big Heart Pet Brands was the Del Monte pet food business left after the US group sold its consumer food arm to Del Monte Pacific in 2013.

The deal is similar to the group's 2008 acquisition of the Folgers coffee business from Procter and Gamble. It marks a big-bang expansion of Smucker's presence into an adjacent sector, providing the group with some important North American brands in a substantial category.

"The acquisition is consistent with the company's strategy of owning leading food brands in attractive center-of-the-store categories, with a focus on North America," Smucker said.

Following completion, Smucker's revenue stream will be somewhat transformed. The group's coffee and pet food businesses will each contribute around a third to sales, with the firm's consumer foods brands - spanning categories such as peanut butter and fruit-based spreads - will account for the rest.

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