Confectionary giant Mars Inc. is buying most of Procter & Gamble's pet food business for $2.9 billion, a move that will shore up the company's growing pet care business.
The all-cash deal will add the Iams, Eukanuba and Natura brands in North America and Latin America to Mars' pet food lineup.
Tom Lachman, the global president of Mars Petcare, said he viewed the acquisitions as "exceptionally strategic."
"The deal reinforces our leadership in pet nutrition and veterinary science," he said in a Wednesday statement.
The McLean, Va., company, which already owns pet brands such as Pedigree and Whiskas, will venture deeper into the growing pet industry. The total market for pet-related sales in the United States is estimated to be about $58.5 billion in 2014, up from $34.4 billion a decade ago, according to the American Pet Products Assn.
The privately-held company will also have the option of buying further rights to Procter's pet business in other countries beyond the original deal. Procter & Gamble, based in Cincinnati, said it was working on separate plans to sell its pet care business in the European Union. The deal covers about 80% of Procter & Gamble global pet sales.
The deal, which is subject to regulatory approval, is expected to be completed in the second half of 2014.
Shares of Procter was down by one cent to $81.34 at midday Wednesday.