General Mills has launched an underwritten public offering of approximately $1 billion of shares of its common stock, in connection with its pending acquisition of Blue Buffalo pet products.
The consumer goods giant says that it intends to use the net proceeds from the equity offering to help finance the Blue Buffalo deal, which was announced last month.
General Mills agreed to buy the maker of natural dog and cat food for about $8 billion, adding to its portfolio of products that includes Haagen-Dazs ice cream and Cheerios cereal.
If the acquisition does not close, General Mills says that it expects to use the proceeds from the equity offering for 'general corporate purposes'.
Last week, General Mills lowered its full-year profit forecast, citing higher freight and commodity expenses.
“We are moving urgently to address this increasingly dynamic cost inflation environment,” chief executive officer Jeff Harmening said in a statement last Wednesday.
Although the company has struggled to ignite sales in recent years, General Mills now seems to have turned a corner under Harmening, who took over as CEO last year.
The potential takeover of Blue Buffalo was also seen as a move that could further boost sales in a fast-growing category.
“In pet food, as in human food, consumers are seeking more natural and premium products,” Harmening noted.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.