Spectrum Brands To Buy P&G's European Pet Care Business

(RTTNews) - Consumer goods giant Procter & Gamble Co. (PG) said Tuesday that Spectrum Brands Holdings Inc. (SPB) has agreed to buy the company's European Pet Care business. Financial terms of the deal, which marks P&G's exit from the pet care business, were not disclosed.

A.G. Lafley, President and Chief Executive Officer of P&G, said, "Exiting Pet Care is an important step in our strategy to focus P&G's portfolio on the core businesses where we can create the most value for consumers and shareowners. The transaction creates value for P&G shareowners, and we are confident that the European business will thrive at Spectrum, a leading company in pet care."

While reporting its financial results for the fourth quarter in August 2014, P&G said it completed the sale of its three pet food brands Iams, Eukanuba and Natura in some major markets to privately-held confectionery company Mars, Inc. The $2.9 billion deal was agreed upon in early April.

That sale comprised 80 percent of P&G's global Pet Care business, including North America and Latin America. Europe was not included in that deal, with the exception of Russia and Turkey.

McLean, Virginia-based Mars had said at that time that it will also exercise the option to buy P&G's pet food businesses in additional markets, including Japan, Australia and South Africa. That transaction, for an additional 10 percent of P&G's pet care business, is expected to close in about a year.

P&G noted that with the Spectrum Brands transaction, it now has closed deals or reached agreements to sell 100 percent of its Pet Care business.

The geographic regions included in the deal with Spectrum Brands, which accounts for about 10 percent of P&G's former pet care global sales, include 42 markets throughout Europe. The deal will close in 2015.

Middleton, Wisconsin-based Spectrum Brands has a pet care business with brands representing $600 million in global sales, including Tetra, Furminator, 8 in 1, and Dingo.

In a separate statement, Spectrum Brands noted that the business being acquired by it from P&G has about $200 million of annual sales, and will provide the company's United Pet Group division access to the $21 billion European dog and cat food market that is growing at an estimated 3 to 5 percent annually.

Dave Lumley, President and CEO of Spectrum Brands said, "This acquisition will expand and further strengthen our United Pet Group's broad companion animal product portfolio and help to achieve our objective for more balance between our two products segments of aquatics and companion animals. We already have a strong European pet supplies infrastructure in place that will enable us to leverage these well-known pet food brands in the UK and Europe."

PG closed Monday's trading at $84.81, up $0.34 or 0.40 percent on a volume of 8.40 million shares. SPB closed Monday's trading at $86.13, down $0.09 or 0.10 percent on a volume of 226,560 shares.