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The transaction, which excludes the brands’ activities in certain markets, mainly in Europe, will be finalized in the second half of the year, the companies said in a statement on Wednesday.
The acquisition gives Mars, based in McLean, Va., The Iams, Eukanuba and Natura brands to add to its Pedigree, Whiskas and Royal Canin lines. AG Lafley, who came back as P&Ggeneral manager last year, has strived to reduce costs and focus the company on its core business.
P&G will restate earnings for fiscal 2013 and 2014 by 3-4 cents of basic earnings from discontinued operations. The sale will not affect P & G’s earnings growth forecast for its fiscal 2014, which ends in June, and will not have a material effect on fiscal 2015 results. The money from the sale will be used for general business purposes, the company said.
Cincinnati-based P&G rose 0.6% to $ 81.86 as of 9:59 a.m. in New York City. Stocks were little changed this year until Tuesday.
Upon his return in June, Lafley began evaluating P&G units for potential divestitures. Analysts and investors alike saw Iams as a natural fit. “The unit does not ship for P&G,” said Ali Dibadj, analyst at Sanford C. Bernstein & Co. in New York earlier this year.
Second term
Lafley’s second term came with great expectations. In his first turn as CEO, he oversaw the $ 57 billion acquisition of Gillette Cie., expanded P & G’s overseas presence and presided over the introduction of successful new products, such as Swiffer cleaner.
The company lowered its forecast for profit and sales growth this year in January due to exchange rate fluctuations and policy changes in Venezuela. The move follows second quarter earnings that beat analysts’ estimates.
Bloomberg
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