(Bloomberg) -- General Mills Inc. has agreed to sell its North American yogurt business, which includes the popular Yoplait brand, for $2.1 billion in cash.
The New York-listed firm will sell its US and Canadian operations to French dairy companies Groupe Lactalis and Sodiaal, respectively, according to a statement on Thursday that confirmed an earlier Bloomberg News report.
Heightened competition with the likes of Danone SA and Chobani Inc. in the US, along with limited penetration of the market, led to discussions of an exit from the country’s yogurt market, Bloomberg Intelligence analysts Jennifer Bartashus and Jibril Lawal wrote in a note in May. General Mills is also angling its portfolio to growth segments such as premium pet food and organic snacks, they said.
General Mills sold the European Yoplait operations to Sodiaal in 2021 in exchange for the Canadian business and lower royalty rates for the Yoplait and Liberte brands in the US and Canada. The company’s US retail yogurt business alone generated $1.4 billion in sales in the 12 months to May 19, Bartashus and Lawal wrote in their note. Yoplait accounted for 87% of that, they said.
“By efficiently managing our portfolio and sharpening our focus on our global platforms and local gem brands that have stronger growth prospects and more attractive margins, we will be in a better position to drive top-tier shareholder returns over the long term,” General Mills Chairman and Chief Executive Officer Jeff Harmening said in a statement.
General Mills’s shares have advanced about 12% this year, giving the food manufacturer a market value of $40.7 billion.
The proposed transactions are expected to close in 2025. JPMorgan Chase & Co. was exclusive financial adviser to General Mills.
--With assistance from Alan Katz, Ben Scent and Fion Li.
©2024 Bloomberg L.P.
