Mars to buy Royal Canin
July 10, 2001 Posted: 1030 GMT
LONDON (CNN) -- U.S. candy and pet-food maker Mars agreed on Tuesday to buy control of French pet-food maker Royal Canin for 819 million euros ($700 million).
Royal Canin Chief Executive Henri Lagarde said in a statement Mars agreed to buy 56.4 percent of Royal Canin for 145 a share, a 29 percent premium over Canin's average share price last month.
The closely held U.S. company, based in McLean, Virginia, is already the market leader in European pet food, with almost half of the market. It is buying the Royal Canin stake from French bank BNP Paribas.
The transaction will combine the Pedigree dog food and Whiskas cat food of Mars with Royal Canin's products such as Natural Blend and Sensible Choice. Royal Canin (PREX) is strong in the premium dry pet-food market, while the main Mars pet products are wet, tinned pet food.
Shares in Royal Canin were suspended on Monday at 122.70 amid speculation about a bid. The deal values Royal Canin at 1.51 billion. The French company will become part of the Mars European unit Masterfoods if the transaction is approved by the European Union's antitrust body.
Pet food, which represents a $30 billion market worldwide, has increasingly become an area of interest for multinational food and consumer-goods companies such as Swiss-based Nestle and Procter & Gamble (PG: Research, Estimates) of the U.S.
Last year, P&G bought specialty pet-food concern Iams and took the Iams brand out of specialty pet stores into 25,000 U.S. supermarkets.
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