Food manufacturer General Mills announced its plan to acquire Berkeley-based organic food company Annie’s Inc. for approximately $820 million Monday.
General Mills has agreed to buy Annie’s for $46 per share in cash and plans to incorporate the company into General Mills’ organic and natural foods division, which includes brands such as Cascadian Farm and Muir Glen. Annie’s products include macaroni and cheese, cookies and various bunny-shaped snacks.
There are no immediate plans to make any changes to Annie’s products, according to Bridget Christenson, external communications manager for General Mills. According to a press release, Annie’s intends to use General Mills’ resources to expand the reach of its products.
The current CEO of Annie’s, John Foraker, has agreed to stay with the company for at least a year to help position Annie’s for its next stage of growth, Christenson said.
“Powerful consumer shifts toward products with simple, organic and natural ingredients from companies that share consumers’ core values show no signs of letting up,” Foraker said in a press release. “Partnering with a company of General Mills’ scale and resources will strengthen our position at the forefront of this trend.”
General Mills is one of the largest cereal and snack-food manufacturers that can be found in retail stores, known for popular meal and snack brands such as Cheerios, Pillsbury and Nature Valley. The company believes Annie’s could help accelerate its growth in the natural and organic segment of the food and beverage industry, said Jeff Harmening, executive vice president and chief operating officer of General Mills’ U.S. retail, in a statement.
Sales in the U.S. branded organic and natural foods industry have been growing at a 12-percent compound rate over the last decade, Harmening said.
The company’s other natural food acquisitions in recent years include Brazilian food maker Yoki Alimentos SA and U.S.-based snack foods company Food Should Taste Good.
Cal Dining, which currently uses and carries some Annie’s products on campus, will continue to use the brand and doesn’t think the acquisition will negatively affect the label, according to executive director Shawn LaPean.
“General Mills has owned Cascadian Farms for many years and it doesn’t seem to be an issue with those in the natural food industry, nor with customers that prefer natural foods,” LaPean said in an email. “I would assume the same would be true for Annie’s.”
Annie’s, which was founded 25 years ago, plans to keep its headquarters in Berkeley.
Annie’s products are made without artificial flavors, synthetic colors or preservatives that are regularly used in packaged foods, according to a statement released by Annie’s Inc.
The Annie’s Board of Directors has unanimously recommended that Annie’s stockholders accept General Mills’ offer. The transaction is expected to be finalized later this year.