Nestlé may have paid through the nose for Ralston Purina, the world's largest dry dog and cat food manufacturer, but it has landed a good deal, according to analysts. The $10.3bn merger of Nestlé's Friskies petfood business with Ralston puts a huge premium (36%) on the dry petfood firm, observed one analyst. "But petfood is a growth area. Nestlé clearly has the cash to play with and the exchange rate is in its favour." However, given Ralston has a 27% share of the US dogfood market and Nestlé has 12%, the deal could well prompt regulatory concerns, cautioned Williams de Broe analyst David Hallam. He added: "If they could get away with it, the deal makes perfect sense for Nestlé." The US petfood market is growing at 6.5% a year, twice the rate of growth for standard food products, making the St Louis based firm particularly attractive, even at $10bn, said Lehman Bros analyst Nick Sochovsky. "The crucial issue is whether the regulators see wet and dry as separate categories. If they do, Nestlé is home and dry. If not it would probably sell the wet brands to get the deal." Ralston Purina is best known for Purina Dog and Cat Chow, Meow Mix, pet snacks and UK brand Baker's. {{NEWS }}