General Mills is buying organic food company Annie's for $820 million, or $46 per share.
This price represents a 51% premium to Annie's 30-day average share price as of Sept. 5.
In after hours trade on Monday, shares of Annie's were up as much as 37% to about $46 per share.
Here's the full announcement from the companies:
BERKELEY, Calif., Sept. 8, 2014 /PRNewswire/ -- Annie's Inc. (BNNY) ("Annie's"), a leading natural and organic food company, announced today a definitive agreement to be acquired by General Mills, Inc. (GIS) ("General Mills") for $46.00 per share in cash, for a total transaction value of approximately $820 million. This acquisition will enable Annie's to enter a new phase of growth and success while maximizing value for stockholders. The transaction consideration represents a 51% premium over Annie's 30-day average closing price of $30.47 as of September 5, 2014. Annie's will continue to be headquartered in Berkeley, California.
"We are excited about this strategic combination, which will enable Annie's to expand the reach and breadth of our high quality, great tasting organic and natural products, provide new opportunities for our employees, realize greater efficiencies in our operations, and maximize value for our stockholders," said John Foraker, Chief Executive Officer of Annie's. "Powerful consumer shifts toward products with simple, organic and natural ingredients from companies that share consumers' core values show no signs of letting up. Partnering with a company of General Mills' scale and resources will strengthen our position at the forefront of this trend, enabling us to more rapidly and efficiently expand into new channels and product lines in a rapidly evolving industry environment.
"Annie's will remain dedicated to our mission: to cultivate a healthier and happier world by spreading goodness through nourishing foods, honest words and conduct that is considerate and forever kind to the planet. Authentic roots, great tasting products, high quality organic and natural ingredients, and sustainable business practices will continue to be the cornerstones of the Annie's brand," concluded Foraker.
Molly Ashby, Annie's Chairman of the Board of Directors, stated, "This transaction is a testament to the great team at Annie's. Together, they have built a highly successful company around the authentic, mission-driven concept that Annie Withey originated 25 years ago. Annie's is a pioneer of the new generation of company that does well by doing good, generating great value for all stakeholders. This is strategically the right time to pursue this combination because it brings operational, sourcing and distribution capabilities that enable Annie's to build on its leadership position in the natural and organic market."
The Annie's Board of Directors has unanimously recommended that Annie's stockholders accept the General Mills offer. General Mills will launch a tender offer within ten business days to purchase all outstanding shares of Annie's. General Mills' offer will be subject to the tender of a majority of Annie's shares and to certain other customary closing conditions including regulatory approval. The transaction is expected to close later in calendar 2014.
Annie's financial advisor for the transaction is J.P. Morgan Securities LLC and its legal advisor is Proskauer Rose LLP.
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