Against the odds, Iams proved to be one of Procter & Gamble's more successful acquisitions of the 1990s. The strong image and unconventional names of Iams and Eukanuba certainly stuck in the minds of pet owners, allowing P&G to double sales between 1999 and 2004 and convert what was once little more than a niche business into one of the leaders in several segments of the US pet food market. The group bolstered its portfolio in 2010 with the acquisition of niche manufacturer Natura Pet Products. The pet care business became a unit of P&G's Global Health & Grooming business division from summer 2013, but there were repeated rumours that the group might be considering a disposal of the business. That speculation was confirmed in Spring 2014 with a deal to sell the business in most global markets to rival Mars for $2.9bn. The takeover completed in August. The remaining operations in Europe were sold to Spectrum Brands at the end of the year.
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Mars / Spectrum Brands
Recent stories from Adbrands Weekly Update:
Adbrands Weekly Update 25th Sept 2014: P&G has finally secured a buyer for its Iams and Eukanuba petfood business in Europe. Elsewhere, the business has been acquired by Mars, but the addition of Iams Europe would have created inevitable monopoly issues because Mars is already the leading petfood marketer in the region. Instead, P&G will sell the brands to Spectrum Brands, a diversified group which already owns a number of smaller petfoods under the United Pet umbrella as well as home hardware products including Rayovac batteries, and Russell Hobbs, Remington and George Foreman small household appliances. Its best known existing pet brand is probably the Tetra fish care range, though it also owns various dog and cat products. The sale price was not disclosed. Iams and Eukanuba's European sales amounted to around $200m last year.
Adbrands Weekly Update 14th Aug 2014: Mars expanded its acquisition of P&G's Iams and Eukanuba brands. The deal to acquire the business in the Americas closed at the beginning of the month, but Mars had an option to add additional markets at a later date. It has now exercised that right for Australia & New Zealand, Japan and Singapore, as well as undisclosed other markets in Asia, the Middle East and Africa. Completion may not take place until 2015. The fate of the pet food brands in Europe has yet to be decided, but Mars has ruled out their acquisition there because it already has a leading local market share.
Adbrands Weekly Update 10th Apr 2014: Procter & Gamble announced its exit from the petcare market, with a deal to sell Iams, Eukanuba and Natura in the US, Canada and Latin America to larger rival Mars for $2.9bn. The deal doesn't include European Union markets, where P&G said it has alternative sale plans, without providing further detail. In a statement, P&G CEO AG Lafley 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." Mars is already the biggest petfood company worldwide, with brands including Whiskas, Pedigree and Royal Canin, but sits in second place in the US behind Nestle Purina. The new deal widens its global lead and preserves the US #2 position. There had previously been talk of a possible merger between Iams and third-placed Big Heart Pet Foods (previously known as Del Monte), which would have leapfrogged Mars for the #2 spot.
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