General Mills Mulls Over $2 Billion-Plus Sale of North American Yogurt Business
Source: The DairyNews
Sources familiar with the matter revealed to Reuters that General Mills, renowned for brands like Cocoa Puffs and Cheerios, is contemplating the sale of its North American yogurt business, which includes the iconic Yoplait brand, writes Dairynews.today
The potential deal, estimated to exceed $2 billion, signifies a strategic shift for the Minneapolis-based food giant.
Teaming up with investment bank JPMorgan Chase, General Mills aims to gauge interest from potential buyers, ranging from rival snack food manufacturers to private equity firms. While discussions are ongoing, confidentiality surrounds the negotiations.
Insiders indicate that General Mills seeks a valuation for its yogurt portfolio at nearly ten times the unit's annual earnings before interest, taxes, depreciation, and amortization, which hovers around $250 million.
Both General Mills and JPMorgan declined to comment on the matter.
The past year has seen General Mills' shares decline by approximately 19%, reflecting market challenges. However, the company managed to surpass market expectations for third-quarter sales and profit in March, buoyed by price increases across its breakfast cereals, snack bars, and pet food categories.
Yoplait, born out of a collaboration between French dairy farmers and General Mills in 1977, holds a significant place in the company's history. In 2011, General Mills acquired a majority stake in Yoplait, worth $1.2 billion, from private equity firm PAI Partners and French dairy cooperative Sodiaal. While Sodiaal retained a portion of the ownership, General Mills recently divested its European Yoplait operations to Sodiaal in 2021.
With the European unit offloaded, General Mills views its remaining yogurt assets as non-core within its current strategy. Faced with formidable competition from industry leaders like Chobani and Danone's Dannon brand, the company seeks to streamline its focus and optimize its portfolio for future growth opportunities.
Teaming up with investment bank JPMorgan Chase, General Mills aims to gauge interest from potential buyers, ranging from rival snack food manufacturers to private equity firms. While discussions are ongoing, confidentiality surrounds the negotiations.
Insiders indicate that General Mills seeks a valuation for its yogurt portfolio at nearly ten times the unit's annual earnings before interest, taxes, depreciation, and amortization, which hovers around $250 million.
Both General Mills and JPMorgan declined to comment on the matter.
The past year has seen General Mills' shares decline by approximately 19%, reflecting market challenges. However, the company managed to surpass market expectations for third-quarter sales and profit in March, buoyed by price increases across its breakfast cereals, snack bars, and pet food categories.
Yoplait, born out of a collaboration between French dairy farmers and General Mills in 1977, holds a significant place in the company's history. In 2011, General Mills acquired a majority stake in Yoplait, worth $1.2 billion, from private equity firm PAI Partners and French dairy cooperative Sodiaal. While Sodiaal retained a portion of the ownership, General Mills recently divested its European Yoplait operations to Sodiaal in 2021.
With the European unit offloaded, General Mills views its remaining yogurt assets as non-core within its current strategy. Faced with formidable competition from industry leaders like Chobani and Danone's Dannon brand, the company seeks to streamline its focus and optimize its portfolio for future growth opportunities.
