Annie's shares spiked more than 37 percent in extended-hours trading after the announcement. General Mills shares were unchanged.
General Mills will pay $46 a share in cash to acquire the company. Annie's said the transaction consideration represents a 51 percent premium over Annie's 30-day average closing price of $30.47 as of September 5, 2014
The deal, which is expected to finalize later this year, is expected to reflected in General Mills' earnings within the first 12 months after its completion. General Mills plans to fund the acquisition through available credit.