AG Lafley has made his first big move to restructure Procter & Gamble since returning to be its chief executive for a second time by agreeing to sell three of its pet food businesses to Mars for $2.9bn.
In the all-cash deal announced on Wednesday Mr Lafley is reversing one of his predecessor Bob McDonald’s deals by selling off the Natura pet food business he acquired in 2010.
The move is part of P&G’s effort to focus on core businesses and boost its sales growth and profitability to win back the favour of investors who were unhappy with its performance under Mr McDonald, who stepped down last June.
The other businesses P&G is selling are Iams and Eukanuba, which the consumer goods group acquired in 1999. P&G shares rose 0.8 per cent to $81.98 in early New York trading after it announced the divestiture.
Mars Petcare, part of a privately owned group better known for its chocolate, will add the businesses to its portfolio of pet brands, which include Whiskas and Pedigree.
Mr Lafley said in a statement: “Exiting pet care is an important step in our strategy to focus P&G’s portfolio on the core businesses where we can create the most value for consumers and shareowners.”
The companies expect to complete the transaction in the second half of 2014, subject to regulatory approvals.
Todd Lachman, global president of Mars Petcare, said: “The deal reinforces our leadership in pet nutrition and veterinary science, attracts world class talent and grows our world-leading portfolio.”