BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Tuesday, 16 January, 2001, 15:55 GMT
Nestle in $10.3bn pet food buy
ralston purina
Ralston Purina is the leading manufacturer of pet food in the US and Canada
The world's biggest food company Nestle has bought US pet food business Ralston Purina for $10.3bn (£7bn).

The deal brings together some of the world's biggest pet food brands including Nestle's Friskies, Mighty Dog and Alpo and Ralston's Purina Dog Chow.

The Swiss food giant is offering $33.50 for each Ralston share - a 36% premium to the Friday closing price of the US firm's shares.

"We have seized a unique opportunity to merge two organisations that share a similar outlook and similar cultures," said Nestle's chief executive officer Peter Brabeck-Letmathe.

However, the deal could also raise anti-trust concerns as Ralston has a 27% share of the $4.3bn dog food market, while Nestle has 12%.

In cat food, Ralston has 33% of the $2.6bn market while Nestle has 13%.

The merged company's sales will reach $6.3bn, putting it ahead of Mars, currently the world's largest pet food maker, with sales last year of $5.85bn.

Ice cream deal

Late last year, Nestle said it was in talks to buy the 50% of premium ice cream giant Haagen-Dazs that it did not already own.

That deal might be worth as much as $650m, analysts had said.

Nestle already owns key global food and drink brands including Perrier mineral water, Nescafe coffee and L'Oreal beauty products.

Only chocolate has the larger market than pet foods among Nestle's businesses - at some $40bn.

Pet food sales are growing by about 6.5% annually, almost double that for human food.

Nestle shares rose 1.6% on confirmation of the buyout - to 3,528 Swiss francs by 1212 GMT.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

20 Jul 00 | Business
Wall's ice cream concedes defeat
10 Jul 00 | Business
Nestlé in sterling debate
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories