Nestle may purchase Champion Petfoods for US$2 billion
Nestle’s consideration of Champion may be related to pressure from activist investor Daniel Loeb.
Nestle is in talks to purchase dog and cat food and treats maker Edmonton, Alberta, Canada-based Champion Petfoods for more than US$2 billion, although the transaction is not assured, reported the Wall Street Journal.
Nestle’s consideration of Champion may be related to pressure from activist investor Daniel Loeb, who recently published a letter criticizing Nestle for not delivering increased profits for shareholders quickly enough.
Champion Petfood neither confirmed nor denied the speculation about a purchase by Nestle. In a Facebook post, the company said, "While we have certainly seen the speculation in media reports about Champion Petfoods’ future, we hope you can appreciate that it is our policy to never comment on rumours or speculation in the market. Rumours about Champion being sold have been circulating over the past few years and will continue for as long we deliver on our promise to make the world’s best pet food under our ACANA and ORIJEN brands.
Champion Petfoods continues to be privately held with investment from our Canadian partner, Bedford Capital, and our vision remains—build trust with Pet Lovers everywhere. We are focused every day on delivering on our commitment to provide our customers with the world’s best pet food and the highest quality service."
Background of Champion Petfoods
According to Petfood Industry’s Top Companies database, In 2017, Champion had annual revenue of US$180,000,000. Champion employs approximately 500 people at its two plants.
Champion Petfoods uses fresh, regionally obtained ingredients to produce dry and freeze-dried food and treats for dogs and cats, under the brands Orijen and Arcana. The company focuses on what it considers to be 'biologically appropriate,' protein-rich, grain-free petfood. Ingredients include free-range poultry, free-range red meat, and wild-caught fish. Champion company produces its food in Canada and in 2016 it opened a facility in the US. Champion opened its first production facility in the US, a 371,000-square-foot. site on 85 acres in Kentucky. Called DogStar Kitchens, the plant’s annual capacity is 100 metric tons for Champion's Acana and Orijen brands. Champion exports to more than 80 countries worldwide.
Background of Nestle Purina PetCare
Long a leader in the US market, Nestlé Purina also operates pet food factories in 19 countries and on every habitable continent. Nestlé Purina claims three headquarters globally: St. Louis, Missouri, USA, for its North American and Latin American operations; Lausanne, Switzerland, in Europe; and Sydney, Australia, covering Asia, Oceania and Africa. Its parent company Nestlé's world headquarters are in Vevey, Switzerland.
In 2017, Purina PetCare reached US$12,500,000,000 in annual revenue. Purina had 46 production plants and 58 facilities in total. The company employs approximately 14,500 people around the world.