General Mills, Inc. (NYSE:GIS) announced on Monday, September 8th that it plans to acquire well-known organic food producer Annie’s for around $820 million. The cereal giant agreed to pay $46 per Annies Inc (NYSE:BNNY) share, a greater than 50% premium to the average price over the last 30 days.

General Mills

The acquisition is anticipated to finalize later this year, and will be reflected in General Mills’ earnings within the first 12 months after its completion. The acquisition will be funded through a standing credit line.

Statement from General Mills

Jeff Harmening, General Mills, Inc. (NYSE:GIS) executive vice president and CEO, spoke glowingly about the deal..”This acquisition will significantly expand our presence in the U.S. branded organic and natural foods industry, where sales have been growing at a 12 percent compound rate over the last 10 years.”

“Annie’s competes in a number of attractive food categories, with particular strength in convenient meals and snacks—two of General Mills’ priority platforms,” Harmening continued.

More about Annie’s

Perhaps best known for its a line of mac and cheese products as well as pizzas, salad dressings, crackers and other snacks, Annies Inc (NYSE:BNNY) reported $204 million in sales last fiscal year, up round 20% year over year.

The California-based firm offers 150 organic products in more than 35,000 retail locations in the U.S and Canada.

Annie’s said in a statement, “partnering with a company of General Mills, Inc. (NYSE:GIS)’s scale and resources” will maximize value for stockholders and help it to expand into new channels and product lines

Annies Inc (NYSE:BNNY) shares are up over $12 (37%) to $46.04 in premarket trading Tuesday on news of the deal.

Buyout leads to controversy

News of the buyout created a major controversy on social media. Many fans of Annies Inc (NYSE:BNNY) were upset, pointing out that General Mills has fought efforts to label genetically modified foods, while Annie’s has lobbied for strong labeling requirements.

“Congrats Annie’s! You have just lost thousands of customers!” read one comment. “It’s too bad you’ve decided to merge with a big corporation who cares more about their bottom line and not the customer,” wrote another upset customer.

In its statement, the firm said that it would stay true to its values of healthy food and operating as an environmentally conscious business.