General Mills is considering selling its North American yogurt business, including the popular Yoplait brand, in a potential deal worth more than $2 billion. The Golden Valley-based food conglomerate is working with investment bank JPMorgan Chase to gauge interest from potential buyers, which could include rival snack food makers and private equity firms. They are aiming to fetch a valuation for the yogurt portfolio of nearly 10 times the unit’s 12-month earnings before interest, taxes, depreciation, and amortization of about $250 million.
Shares of General Mills have fallen by around 20% over the past year, valuing the company at about $40 billion. In March, General Mills beat market expectations for third-quarter sales and profit due to higher prices for its breakfast cereals, snack bars, and pet food products. General Mills partnered with Yoplait in 1977 through a franchise agreement that gave them exclusive rights to market the brand in the US.
In 2011, General Mills acquired a 51% stake worth $1.2 billion in Yoplait from private equity firm PAI Partners and French dairy cooperative Sodiaal. Sodiaal retained the remaining stake. In 2021, General Mills sold the European operations of Yoplait to Sodiaal. The company’s U.S., Canada yogurt operations generated a combined $1.4 billion in net sales for fiscal 2020.
General Mills has already divested itself of the European unit of Yoplait as part of its current strategy as it faces intense competition from market leaders like Chobani and Danone’s Dannon brand on its home turf. Other yogurt manufacturers have also been active in making deals over the past year, with Campbell Soup looking to divest its Noosa Yogurt unit and Danone selling its Wallaby yogurt and Horizon milk brands to Platinum Equity.
Overall, General Mills sees their North American yogurt business as non-core assets as they continue to focus on their core snack foods business while facing tough competition from other players in this industry sector.
In conclusion, General Mills is exploring selling its North America yogurt business for more than $2 billion through potential buyers such as rival snack food makers or private equity firms while focusing on their core snack foods business while facing tough competition from other players in this industry sector
