Dogs might like Cheerios, but General Mills wants to give them more than that.
The Minneapolis-based food manufacturer, and maker of the famous breakfast cereal, has reached a deal to acquire Blue Buffalo Pet Products for about $8 billion.
The acquisition catapults General Mills into the growing market for natural pet foods made with what it called "wholesome" ingredients.
Wilton, Conn.-based Blue Buffalo sells a wide variety of pet food products, including veterinary diet goods, for a total of $1.275 billion in sales in 2017.
The deal comes as General Mills is seeking to reinvent itself as Americans gravitate away from packaged and processed foods.
The company has had success with some organic and natural food brands for humans, such as Annie's. Now it hopes to do so for pets.
"We are competing more effectively in our existing categories by really listening to consumers and providing a variety of options that meet their needs," General Mills CEO Jeff Harmening said in a statement. "In pet food, as in human food, consumers are seeking more natural and premium products and we have tremendous respect for how attentive Blue Buffalo has been to the needs of their consumers, pet parents and pets, as they have built their brand."
General Mills said the $30 billion U.S. market for pet food is growing at an annual rate of about 3% to 4%. "Wholesome" products make up 10% of that market but are gaining market share.
At $40 per share, the deal price marks a 23% premium above the 60-day average of Blue Buffalo shares. The pet food company's stock rose 17.2% to $39.98 in pre-market trading Friday morning.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
